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MLA seeks formal agreement with AMPC to jointly fund DEXA roll-out

Beef Central, 14/06/2017

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.

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Comments

  1. deborah newell, 16/06/2017

    What is wrong with you MLA! You can’t love the products you are charged with marketing. This promotion of leanness in meat when there is a food and health industry turn-around about the validity and value of cholesterol in the diet – all on the positive side for red meats in Australia – and you come out with this technology to measure and promote lean. Don’t you like food at MLA? Is it just a dietary supplementation for you? Look at the countries and their food industries that reach high regard in cuisine – all are run by bureaucracies that love the foods they represent. So MLA try and love your beef and love your beef fat – BUT- more than that, spend some money on researching flavour as that is what people pay for whether in a wine or a triple cream (as in a ‘don’t hold the fat’ cheese). Cholesterol is the source of human intelligence so I am thinking the decisions makers at MLA haven’t been getting enough cholesterol. You represent a high end food and if Richard Norton tries to reduce this to objective analysis rather than subjective deliciousness it will become one with MLA’s recent experimentation with ‘fake’ meat.

  2. Eion John Allister, 16/06/2017

    The whole thing appears to me to be a way to reduce risk for processors and to focus the payments to producers into a narrow area of criteria. If this technology is so great then it should be possible to store computer images of the Dexa scans and the carcases should be able to be photographed when graded to provide a unique record of the animal to ensure that the grading assessment is defensible. There are already individual carcase identifiers applied and it is within the current capacity of technology to be able to match this information together and to be able to store it or supply it to the producer . In fact it should be possible to identify each component harvested from the animal and record such information. Producers would know then if their animal contributed a feotus, glands, hide, amount of bone and blood etc. and the value harvested from their animal. If lean meat yield is so important that it needs to be so accurately measured to support the price paid to producers then surely it is just as important to accurately measure the complete range of products that are obtained from the animal and pay producers for the yield of those products as well. It is disingeneous to promote Dexa and its focus on Lean meat yield as a basis for payment without applying the same principles to all other components of the animal. It just doesn’t wash that the price paid for the meat component factors in the additional products. Transparency, a word which is thrown around freely by those in high places, would be apparent and a clear price component available to producers for all elements of the animal. Dexa is being touted as a way of providing information to producers about the lean meat yield of the animals they supply and being a harbinger of information that will drive industry improvement. For many producers it is of limited relevance as their animals only visit the works when it is the end of their breeding life and they are culled. Producers who supply feedlots have made the sale without reference to slaughter data as they don’t get it unless they are vertically integrated or custom feeding and retain ownership. Backgrounders buy cattle out of the paddock or from saleyards and add weight over time, rarely finishing them and have no access to slaughter data unless they custom feed via a feedlot and send to slaughter with retained ownership. Live exporters have no buy in to this at all as their animals never see the hooks here in Australia. This is a massive industry wide cost impost that doesn’t seem to stack up to me, not because of what it can do but more so for what it doesn’t do. It’s like having the super performing GT car which can travel at 300klms per hour and having a single lane bumpy bitumen road to drive it on. Its a marvellous machine and a wonder of engineering achievement but of no real use for a lot of folk and a lot of situations. Dexa provides a focus upon one element of the animal as being the basis for analysis for payment. It doesn’t address the issues of grading variations and a whole range of other structural elements of concern in the industry within the pricing grids and offers no reform to the transparency of payments to producers based of the real worth of harvested components. If an animal which is supplied provides a windfall to the processor via the additional value obtained from gallstones, for example, then surely transparency of operations should see a producer recompensed for supplying that component as well.

    Some interesting developments happening in the field of individual cuts recording, using advanced traceability systems in the boning room, Eion. Stay tuned for more details. Editor

  3. David Byard, 14/06/2017

    Dexta article to my way of thinking no thinking producer would not want accurate and transparent information on the yield and grade and price of cattle. Economists universally agree that markets only function effectively if markets have access key data to make informed decisions. Nobody could deny that we need a new system of measuring the things producers are paid on. The simple fact is company graders assessing carcasses, and processors all have different trimming policy. When the Dexa machines are installed will have company graders having the final say and processors will still trim.. Both Mr Smith CCA and Mr Norton MLA talk about transparency, however when questions are asked, we are met with a wall of silence, cattle producers paying compulsory levy, this is simply not transparent and as producers would have a right to know, legitimate questions. In March of this year the ABA sent an open letter to Mr Norton with a series of questions, if answered would give producers a much better idea of what they can expect out of this new technology. It seems some producers believe that MLA is becoming more dictator than a service provider, If Mr Smith and Mr Norton are serious about transparency, perhaps they conduct forums around the country as was promised when Dexa was first mentioned, this is necessary to explain to producers and answer questions on this 150 million-dollar program.

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