MEAT & Livestock Australia has sought a formal agreement from the Australian Meat Processor Corporation to jointly fund an accelerated roll-out of DEXA objective measurement technology across Australia’s red meat processing industry.
DEXA X-ray image of a beef forequarter.
The proposal would split the anticipated $150 million cost of fully installing DEXA units in up to 90 AUS-MEAT accredited facilities between the processing and production sectors, reflecting the shared benefit that the new system for accurately measuring lean meat yield will provide.
MLA managing director Richard Norton said the collaborative approach would realise more of the potential benefits from DEXA sooner – igniting an industry-wide productivity boom by offering the technology to every AusMeat registered processing plant in the nation.
“If AMPC and MLA can split the cost of implementing DEXA, we can capture greater efficiencies and ensure both the production and processing sectors pay their fair share,” Mr Norton said.
“To date, MLA has sought to meet the early demand from some processors who want to get on with installing DEXA through an initial allocation of $10 million in co-funding.
“That allocation has been massively over-subscribed which is very encouraging. But to fully capture the benefits all the reports have identified, boost our international competitiveness – and ensure no one gets left behind – we need to adopt this technology as an industry.”
Mr Norton said multiple agencies and reports had recommended the industry adopt objective measurement systems, including the ACCC in its recent cattle and beef market study and the red meat industry’s peak councils through their Meat Industry Strategic Plan (MISP 2020).
Most recently, an independent economic assessment commissioned by MLA and AMPC identified a $420 million potential annual benefit to the industry from the full adoption of objective measurement technology.
Another analysis of MLA’s proposal to accelerate the adoption of DEXA conducted by financial services firm EY for AMPC (click here to read Monday’s summary) recommended that industry advance objective carcase measurement initiatives and that AMPC and MLA work together in taking these initiatives forward.
“The Greenleaf report that MLA and AMPC commissioned found the benefits related to measuring lean meat yield account for around 65pc of the potential $420 million annual impact, shared between producers and processors,” Mr Norton said. “The report also noted that if the adoption of objective measurement technology is ‘fast-tracked’ – similar to MLA’s proposal for DEXA rollout – more of the benefits will be realised, and sooner.”
“We have the technology, it’s far superior to the inconsistent and unreliable systems in use now, it’s ready for commercial application and the benefits have been costed over and again. It’s now time to work together as an industry and get on with the job.”
CCA calls for a united front
Cattle Council of Australia is calling for a united front between MLA and the Australian Meat Processing Corporation to co-operatively invest and accelerate the rollout of DEXA objective carcass measurement technology.
The call for a collaborative approach to a whole-of-industry roll-out of the technology to provide impartial and science-driven analysis of carcases comes on the back of findings of an AMPC-commissioned Ernst & Young report into the technology, CCA president Howard Smith said today.
“Cattle Council looks forward to working with our value chain partners in the processing sector to develop greater transparency within industry and share the benefit of OCM technologies,” Mr Smith said.
CCA’s comments more or less repeated sentiments in MLA’s release, published above, issued earlier today.
The EY report reflected findings in the recently released year-long report by Greenleaf, Miracle Dog Consulting and S. Williams Consulting – jointly commissioned by MLA and AMPC – that showed that the potential benefits of the technology relating to measuring lean meat yield were shared between producers and processors, it said.
“We have also seen objective measurement technology recommended by the ACCC, the Meat Industry Strategic Plan (MISP 2020) and MLA’s Strategic Plan 2016-2020,” Mr Smith said.
He highlighted the need to fast track the roll-out of the technology in order to realise the full financial benefits for the industry.
“We know that DEXA technology has been trialled and that DEXA hardware has been commercially used for both sheep and cattle processors for the past two years.”
“The adoption of DEXA’s technology across industry will provide numerous market advantages and will change the way we do business for the better.
“As well as paving the way for scientific measurement of saleable meat yield, there is the potential for future value based marketing and industry-wide productivity gains through processing automation, genetic improvement and data-based on-farm decision making.”
MLA is hosting another briefing and progress report on the roll-out of the technology for processors and the industry’s peak councils next Friday in Sydney.
Sources: MLA, CCA.