LETTER: Drought presents supply chain challenges

LETTER TO THE EDITOR: Drought presents supply chain challenges

I write with regard to news in recent days about impending redundancies at Teys Australia due to cattle supply shortages.

The selling-off of stock by producers due to prolonged drought has 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.

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.

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.

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 tenet 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.

Alison Penfold
CEO – Australian Livestock Exporters’ Council

Tom Dawkins
ALEC Communications & Media Manager
Mobile: 0476 844 886
Email: media@livexcouncil.com.au