Capacity not there to soak up live export numbers, processors say

Processors, producers and live exporters have become unlikely bed fellows, with calls for “a suitable level of support” following the ban on live sheep exports by sea.

Greater investment in meat processing in Western Australia, and a more even flow of stock across the year, would be needed to soak up extra numbers following the federal government’s ban on live sheep exports by sea.

The Australian Meat Industry Council is calling on the government to provide “a suitable level of support” for when the trade ends in May 2028, as planned, saying the whole sheep supply chain will need to work collaboratively.

But AMIC also stressed it and its members did not call for an end to the sheep export trade.

The senate on Monday night passed the controversial ban, which the Coalition has vowed to overturn when it next wins government.

WA Farmers livestock group president Geoff Pearson said while some people were of the opinion that the processing industry would welcome the end of live exports, given less competition for stock, this certainly wasn’t the case.

WA Farmers livestock committee had a briefing with AMIC this week and Mr Pearson said processors understood a live export ban could impact them too.

“The damage really, has already been done, in terms of people’s willingness to run sheep,” Mr Pearson said.

“The WA sheep industry needs live export to keep value in the industry and producers in the industry and processors know that.”

AMIC industry affairs general manager Tim Ryan said Western Australia’s small stock weekly slaughter peaked at about 110,000 head last year which was the best indication of what the current physical capacity and workforce can handle” in the state.

But he said the challenge was small stock turn-off was highly seasonal, and weekly slaughter typically tracked between 70,000 and 80,000 for much of the year.

“To process an additional 500,000-600,000 sheep per year, we’ll need to add an extra 10,000 each week, on average, to the WA kill,” Mr Ryan said.

“If the federal government goes ahead to phase out live sheep exports by 2028, the processing sector will need to expand existing capacity and work with the entire supply chain to smooth highly seasonal turn-off.”

Mr Ryan said increased capacity could potentially be achieved in a number of ways, including upgrading expanding slaughter floors, boning rooms or cold stores.

But he said high finance costs and uncertainty of how producers would respond to a live export ban carried risk.

Mr Ryan said the investment risk could be reduced if further government funding was provided or unlocked from other sources.

Capacity could also be boosted in other, less capital-intensive ways, Mr Ryan said, including making greater utilisation of current facilities, but labour was an issue.

Another option was to make processing more efficient by expanding the carcass trade, which decreased the need for boning room staff.

But he said this required access to regular and affordable airfreight for export out of Western Australia.