TEYS Australia has announced a retraction to a single shift this year at the company’s large Lakes Creek (Rockhampton) beef plant, on the back of a reduction in cattle supply and an increase in live cattle exports.

The reductions will take effect from 15 February.

In a statement issued a few minutes ago, Teys said the supply of available cattle to process had, as predicted by MLA, dropped significantly over the last few months – primarily due to the effects of the prolonged drought. Teys said this had been compounded by an increased demand from the live export sector over the same period.

The Australian Livestock Exporters Council immediately hit back at the suggestion that live exports was to blame.

“To claim that strong livestock export demand is the cause of a downturn in the domestic processing sector belies the facts, and hints at a kind of ‘us and them’ mentality which is damaging for Australia’s red meat industry,” ALEC chief executive Alison Penfold said in a statement issued this afternoon.

Teys general manager corporate services, Tom Maguire, said while the company had been expecting these conditions, it would do everything possible to minimise the effect on its workforce.

To ensure the sustainability of the Rockhampton plant, Teys is reducing daily throughput from 1450 head to 1215 head and consolidating most operations into a single shift – a move that Mr Maguire said would result in some redundancies.

“This is never a good situation, as we value all of our employees. However there must be work for them to do, and at this stage there is a supply shortage that is beyond our control,” he said.

However the company was working closely with affected workers to minimise impacts including offering positions at other Teys’ operations where possible.

He also reassured the local community and producers that Teys was committed to the region in the long-term.

“Teys Australia firmly believes that our Rockhampton plant has a strong, viable future, and that it will provide employment for decades to come in the Rockhampton area,” he said.

The plant is also continuing to focus on supplying premium grassfed beef to key customers around the world.

“We are committed to build on the premium markets which are underpinned by PCAS and MSA. The European Union will remain a key destination for Rockhampton beef,” Mr Maguire said.

“We will continue to provide a strong option in Rockhampton for producers to consider when marketing their cattle.”

Teys claimed the Central Queensland facility was one of the most efficient operations in Australia, employing more than 1100 workers at its peak, contributing $357 million to the regional economy including $155 million in household income, and supporting around 1300 additional jobs in the region.

Live exporters react to suggestion of ‘blame’

Australian Live Exporters Council’s Alison Penfold said the selling-off of stock by producers due to prolonged drought had driven the supply challenges now facing all stakeholders in the red meat supply chain.

“In light of the unsustainably high slaughter figures of 2014 and 2015, the downturn in throughput processors are now experiencing has been inevitable,” she said.

“But any claim that strong livestock export demand is the cause of a downturn in the domestic processing sector belies the facts and hints at a kind of ‘us and them’ mentality which is damaging for Australia’s red meat industry.”

“Livestock exporters would never criticise processors for the numbers they purchase for domestic slaughter, even if it contributes to supply challenges in filling orders for the live trade.

Applying the same principle, it would be clearly unreasonable for one processing business experiencing a production downturn to blame a competing processor for buying too many cattle or pushing prices up, Ms Penfold said.

“Competition is a good thing for the supply chain, especially for producers who should be able to enjoy a full range of market options when selling livestock. The livestock industry is cyclical and closely linked to the vagaries of seasonal conditions.”

“As major players in Australia’s red meat industry, livestock exporters won’t be engaging in any dialogue which denigrates other members in the supply chain, including processors, and expect that other stakeholders do likewise,” she said.

“Much of the red meat supply chain’s long-term resilience comes from the integrated way in which all players in the sector operate. That integration, which is a central tenant of the national Meat Industry Strategic Plan, is a significant strength and, put simply, aims to grow the red meat ‘pie’ for the benefit of all participants.”

Having viewed the ALEC statement, Teys’s Tom Maguire denied that the company was ‘blaming live exports’ for the current position it was in.

“But the fact remains that a lot of killable cattle are in fact leaving Australia on boats,” he said.