Producers must remember consumers

25 Jun, 2015 02:00 AM
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TFI lamb supply chain coordinator David Rutley says the lamb industry is a
TFI lamb supply chain coordinator David Rutley says the lamb industry is a "good news story", defying the declining terms of trade of most other agricultural commodities.

THE processing sector has challenged lamb producers to move from an on-farm focus to having consumers' requirements as their number one priority.

Representatives from SA's two export lamb processors - Thomas Foods International and JBS Australia - said at last week's Profitable Lamb Marketing workshop at Coonalpyn the industry needed to move from a supply chain to a value chain structure.

They admitted processors had previously closely guarded carcase information, but to ensure good times continued they were committed to providing better customer feedback through the chain to ensure production of high quality lamb.

They were also developing better relationships with suppliers and working within industry to develop accurate objective measurement tools, leading to improved consistency and enhanced abattoir surveillance for animal health.

TFI lamb supply chain coordinator David Rutley said the lamb industry was a "good news story" defying the declining terms of trade of most other agricultural commodities with gross margins increasing in the past 15 years.

He highlighted the success in increasing carcaseweights by 30 per cent in this time from 17 kilograms to 21-22kg and total annual production jumping 60pc from 300,000 tonnes to 500,000t.

Data from Meat & Livestock Australia shows that export lamb prices have also risen 30-40pc in the past two years.

"The United States has gone from $7-$11/kg, Europe from $6-$9/kg, the Middle East from $5-$7/kg and China from $3-$4.50/kg," he said.

Dr Rutley said Australia was in a great position with the only other major lamb exporter - New Zealand - unlikely to increase its production, but the challenge may be keeping pace with growing demand.

Australian producers had some "work to do" with the national flock almost below 70 million.

The high-value US market which accounted for about half of TFI's export sales was growing, with grassfed beef and lamb in demand compared to their grainfed product.

"The US is only eating about 1.5kg a person a year so there is a lot of potential growth in the high value, high quality end of the market," he said.

China was the "unknown quantity" but if the forecast export growth of 0.1-0.3mt by 2020 was to be realised the national sheep flock would need to grow substantially in the next five years.

"The 0.1mt is about 20pc of current production so we are looking at a 20-60pc increase in production," Dr Rutley said.

He said the exponential growth of their business and processing capacity meant they had become highly exposed to supply.

TFI operates four plants across Australia at Murray Bridge, Lobethal, Tamworth, NSW, and Wallangarra, Qld, processing 15-20pc of Australia's sheep and lambs.

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    Catherine Miller

    Catherine Miller

    is Stock Journal's livestock editor and South East correspondent
    Date: Newest first | Oldest first

    READER COMMENTS

    Cocky
    2/07/2015 5:01:33 PM, on Stock & Land

    You have got to seriously wonder if these guys(TFI) have ever seen a farm, let alone have been on one! The kiwis won't lift production because as the Meat Industry Excellence Group (NZ) says the cost of production for the NZ farmer to be sustainable against other commodities is around $8kg cwt. They are lower cost producers than us. Want more lamb? Make it worth growing!

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