Why some producers are being hit with $2/kg discounts for lambs

A hidden problem is costing lamb producers up to $2/kg with processors penalising carcasses that don’t make the grade.

Lamb producers penalised by up to $2/kg due to grass seed contamination are not even covering the costs of processors to handle affected carcasses.

Exporter processor JBS has calculated the cost of processing badly seed-damaged lamb carcasses as more than $2 per kilogram as more abattoirs lift penalties and make claims in the saleyard system.

It follows advice from the Department of Agriculture, Fisheries and Forestry of four cases in the past three years of a grass seed being detected during overseas port inspections of meat containers.

The Weekly Times understands one of these was an incident late last year involving lamb processed at a southern meat works.

A DAFF spokesman said a lamb shipment could be rejected if one grass seed was found, but they did not pose a food safety risk.

Grass seeds in lambs mean some producers are being hit with a $2/kg penalty but processors say it costs $2.38 to handle lambs that are contaminated.

JBS Australia livestock manager Steve Chapman described the grass seed issue as “enormous’’ from a cost and handling perspective, and the risk posed to plant licencing and accreditation.

“It is zero tolerance (for grass seed) into the United States,’’ Mr Chapman said.

Mr Chapman said while penalties of $1 to $2/kg imposed by abattoirs may seem harsh, it was not enough to fully recover costs from dealing with badly damaged carcasses.

He told a producer meeting at Wycheproof last week it cost JBS $2.38/kg to slow kill chains, move seed-infested carcasses to a retaining rail plus all the extra trimming and boning.

JBS has now put a grass-seed penalty of $2/kg into its supply contracts.

It comes as lamb buyers from several companies told The Weekly Times successful claims had been made against saleyard prices at several major saleyards this season for grass seed-infested lambs, including Bendigo, Ballarat and the NSW centres of Wagga Wagga and Griffith.

Penalties of up to $2/kg are being discounted against lambs carcasses that have grass seed contamination.

Selling agents at Naracoorte, South Australia, are now declaring lambs as either being guaranteed clean via a statement on a vendor declaration or announce pens as ‘unknown’.

PPHS director Robin Steen, Naracoorte, said there was a price penalty if lambs weren’t guaranteed as seed free and “if you don’t declare lambs as clean then they drop $1kg or more, or $20 to $40’’.

Victorian Farmers Federation livestock group president Scott Young said producers did not expect processors to wear the cost of extra trimming due to grass seed contamination.

“In the auction system, it is buyer beware, and unless lambs are stated as grass seed free, then buyers should make their own decisions on whether to buy or not – they can always walk way and not bid,” Mr Young said.