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Livestock supply, cost competitiveness key challenges says new AMIC chair

by Jon Condon, 22 December 2011

 

An avid Geelong AFL supporter, Frank Herd is pictured with the Club's 2011 Premiership trophyCattle supply, together with regulatory and other cost burdens will be key challenges facing red meat processors heading into 2012, according to the new chairman of the nation’s peak body representing post-farmgate meat industry activity.

Victorian beef and sheepmeat processor Frank Herd was elected chairman of the Australian Meat Industry Council at its recent end-of-year meeting in Sydney. He succeeds Queensland processor, Terry Nolan.

AMIC is the peak council representing the interests of domestic and export processors, independent retail butchers and supermarkets, and smallgoods manufacturers.

Its primary role is to work with members, governments and industry groups to influence policy and provide technical and other advice to the industry.

While Frank Herd is a household name in Victorian and southern NSW processing circles, he is perhaps less well known in other regions of Australia where his Geelong-based family-owned processing business does not have an operational presence.

Mr Herd has spent a lifetime in the meat industry, and currently serves as managing director of MC Herd Pty Ltd, whose Western District facility has capacity to process 3000 cattle and 15,000 sheep and lambs a week.

Founded in 1951 by brothers Frank Sr, Jack, Murray and Fred Herd, MC Herd has grown into a large export and domestic processing entity, employing about 300 staff. Hands-on management by family members is a hallmark of the business.

The plant employs some innovative procedures, including vascular flushing. While most of the beef turnoff ends up in the southern Australian domestic market under the Herds wholesale label, the plant also holds Tier-One export license status, allowing limited export into some overseas markets.

Frank Jr has sat on the AMIC board for some years and was one of the inaugural directors of the Australian Meat Processor Corporation. Back in the 1990s, he was one of the industry stakeholders instrumental in delivering a company-employed meat inspection system. MC Herd was the first plant in Australia to operate under a company-based QA system, with company-employed meat inspectors.

At a regional level, he is also a boardmember of Victoria’s Primesafe organisation, established in 2003 which expanded the responsibility of the former Victorian Meat Authority to include food safety responsibility in red meat, poultry and seafood.

Importantly for his representational role as overall AMIC chairman, Mr Herd is also MD of Challenge Meats, a value-adding and smallgoods manufacturing business established by Herds in the 1960s. He also sits as a director of HW Greenham & Sons Pty Ltd, which operates the high quality grassfed processing plant at Smithton in Tasmania’s northwest, producing premium grassfed brands like Cape Grim, and the hot-boning US manufacturing beef plant at Tongala in Victoria.

Asked about the key challenges facing the processing industry and AMIC more broadly, Mr Herd said livestock supply was again shaping-up as a big focus next year.

“While the past two seasons have been as good as we would ever wish to see, they were preceded by virtually a decade of unbroken drought in many areas on the Eastern Seaboard.

While ever that herd rebuilding process is in place, in both dairy and beef herds, livestock availability will be a problem, and clearly, processors next year will again be fighting for supply. The beef herd, particularly, takes four or five years to build up, after a big drought impact,” he said.

“There’s no doubt that production costs will also be a big ongoing issue in 2012, and Australia will increasingly come under pressure from competing export competitors in North and South America where processing costs are considerably lower.”

“Australia has to become as efficient as it possibly can. Clearly there are some constraints like labour costs, where it will be very hard to compete, but that’s not an excuse for not trying to drive greater efficiencies through the system,” he said.

While Government played a big part in processing cost structures through regulatory costs linked to this year’s AQIS charges decisions and potentially carbon emissions mitigation, so did processors themselves, Mr Herd said.

He remained confident that significant progress could still be made in AQIS fee structures, from where things currently stood.

“You have to stay positive, otherwise nothing will change,” he said.

  • Elected deputy chair at the AMIC boardmeeting last week was Western Australian-based smallgoods manufacturer, Brad Thomason from D’Orsogna. At its meeting, the AMIC board passed a motion of thanks to Terry Nolan and James Ralph as the departing chair and deputy-chair for their considerable contribution to AMIC and its objectives as an organisation over the last four years. Mr Nolan will continue to sit on the AMIC board.
     

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