Abbatoir closures reflect tough times for Australian meat

Posted by Nicole Eckersley on 9th February 2010

Two more abbatoirs have suspended work this week, in a rash of closures prompted by the rising Australian dollar and low stock supply after widespread drought.

Yesterday’s closure of two plants by Leitch Pastoral Group, Killarney Abbatoir and Pittsworth Food Processors, comes hot on the heels of last week’s closure announcement by Burrangong Meat Processors.

Leitch’s Operations Manager Rob Doro says the closures may not be permanent, but that they are considering the future of the business. “The operational issues relate to a myriad of issues, and financial issues are one of those, along with the ability to source livestock and the competitive marketplace with the meat industry.”

Australia’s meat industry is worth $13 billion annually. Chief economist at Meat and Livestock Australia, Peter Weeks, told ABC’s AM that the meat processing industry has been dealt a flurry of blows over the past 12 to 24 months.  “You’ve had the Australian dollar rising very rapidly. It is up 50 per cent now on the same time last year and at historically high levels. You have had severe economic recession in our key markets in the US and Japan. You had US aggressively returning to the Korean market and knocking prices there and of course, now you’ve got on top of all that some widespread rain which is cutting the yarding, so, the number of cattle available for works at the moment.”

Australasian Meat Industry Employees Union federal secretary, Brian Crawford, also believes that the controversial live export trade is a factor in the closures. “The live export trade is growing at an alarming rate, just keeps getting bigger and bigger and as a consequence processors are finding it very difficult to compete with the live trade because they don’t have the overheads the processors have.”

Concerns were raised in 2003 about the welfare of live-export animals after nearly 60,000 sheep were stranded onboard the Cormo Express; since then, standards for live export have been drawn up, but these are often difficult to enforce.

According to Weeks, the problem is unlikely to improve anytime soon. “We are going to feel that this year in lower numbers coming through and I think it will take a while before US and Japan, in particular, dig themselves out of the economic problems they’ve got,” he said.