Labour shortage to squeeze processors

Sheep
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It could only be a matter of time before the entire industry is hit with a "huge amount of pain", should staff absenteeism continue.

RECORD livestock prices, limited supply, logistical issues and severe labour shortages have created a near perfect storm for Western Australia's meat processing sector.

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And it could only be a matter of time before the entire industry is hit with a "huge amount of pain", should staff absenteeism continue.

However it is not just WA processors who are desperate for labour - it is a national problem that has been around for some time and has been heightened by COVID-19.

Australian Meat Industry Council (AMIC) chief executive officer Patrick Hutchinson said 75 per cent of facilities across the country were operating at a capacity of 80pc or less.

He said WA could be harder hit again, given the State government's tight interstate and international border restrictions and closures.

"There are some fairly big facilities in WA across beef, sheep, pork and goat," Mr Hutchinson said.

"While they all vary in size and location, they all share the same issue - that is they are struggling to find workers."

Every day, Australia's meat industry advertises between 3500 and 4000 positions for both skilled and unskilled workers.

Butcher shops are also close to reaching a pinch-point with more than 500 vacancies posted.

According to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) beef and veal September quarter 2021 outlook beef production is forecast to rise by 7.2pc to 2061 kilotonnes in 2021-2022, despite high input prices and labour shortages.

In the 12 months to June 30, only a limited number of market-ready cattle were available due to a low national herd size.

This is expected to change next year, as the impact of herd rebuilding becomes more apparent.

A recent AMIC member survey stated 59pc of processors in Australia cited a lack of skilled labour as the reason for workforce shortages and 23pc pointed to the lack of visa and international workers.

Additionally, concerns had been raised about the ability to return to higher capacity as processors did not have workers to draw on.

The ABARES outlook said shortages were unlikely to change significantly through 2021-2022 and were therefore likely to affect meat production volumes.

"The cattle herd is recovering from a 30-year low and processing volumes are accordingly low," the outlook said.

"The processing industry relies on visa holders and recent migrants to make up its workforce and therefore is subject to the current cap on international arrivals in Australia.

"To take advantage of a larger herd in the future, the processing industry will have to ensure it has sufficient skilled labour."

Mr Hutchinson said meat processing businesses in Australia wanted to hire a local workforce and the misnomer of 'cheap overseas labour' was untrue.

"Hundreds of thousands of dollars have been invested in extracting an international workforce," he said.

"The industry is having to pay for quarantine and will pay for quarantine because it needs it.

"Everyone is paid the same, employers are actually taxed on overseas workers.

"This includes putting money into the Skilling Australia Fund, which is there to - as the name suggests - skill Australians.

"The problem is we are unsure if any money has been invested from that fund into the meat industry."

Mr Hutchinson described "finding people who wanted to do the work" as the biggest in the job market.

He said COVID-19 Jobseeker payments had taken much of the incentive out of working, with people electing to stay at home.

However, some unions disagreed and floated the idea of increased wages as a possible solution.

"Already we have - and are viewed to have - the most expensive meat processing workforce in the world," Mr Hutchinson said.

"We also have the most expensive livestock and logistics chain, yet some way or another we have still been able to keep our head above the water and hold onto the majority of our markets.

"However, another year of this and I would suggest there is going to be a huge amount of pain, so throwing up wages is not the answer."

Mr Hutchinson suggested farmers would be the first affected through lower livestock prices.

He said processors could then be forced to close down entirely or operate on reduced shifts to try and chase margins.

"Most agricultural areas are going to produce more raw material in livestock at a time when we are seeing good seasons," he said.

"If we find that we don't have the ability to process meat, animals would then age and the opportunity to be sold as for example, lamb, would be lost.

"That is what we are trying to make everyone aware of."

When it comes to enticing people to work for the meat industry, Mr Hutchinson said it simply came down to understanding its true value, as well as the opportunities that existed for unskilled, semiskilled and skilled workers.

He said for people out of work, or who had been out of work for a while in rural and regional areas, employment had the opportunity to open the door to a career.

"The jobs are there and we are more than happy to help people in any way, shape or form," Mr Hutchinson said.

"There are a range of different areas for people to work in from augmentation, gamification, automation, as well as processing livestock and boxing meat.

"Yes, it is difficult in some parts and it is factory work, but it is well paid factory work and, as I said, we have the highest paid meat processing industry workforce in the world."

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