BYPRODUCTS in cattle processing are factored into over-the-hooks prices paid to producers and meat graders are independently trained and audited, beef processors say.
Abattoir operators have strongly rebutted claims producers are being cheated as much as $250 worth of offal per beast and getting a poor deal because graders are paid for by meat companies.
They also say comparisons to dressing percentages in the United States lacks knowledge of commercial realities.
That point, along with the assertion offal is built into the cents-per-kilogram rate, has been seconded by peak producer representative group Cattle Council of Australia.
Processors said claims made by the smaller producer group Australian Beef Association that historical arrangements precluded almost half a beast’s weight from being paid were a long way off the mark and created unwarranted tension in the supply chain.
The Australian Meat Industry Council’s national director processing Stephen Martyn said all revenue streams were considered when purchasing livestock, including meat, hide, byproducts (tallow) and offal in identifying a final value and what the product could be sold for to cover costs.
“It’s not correct to say offal is not factored into the final value of an animal,” he said.
Mr Martyn said the whole industry agreed to company-employed independent graders in the 1990s.
If there was a desire to review the current system then the costs of the changed service needed to be considered, he said.
“Company-based graders operate as part of the company’s quality systems and are independently trained by Ausmeat and audited by Ausmeat,” he said.
Ausmeat is owned 50:50 by processors and producers.
At the time the agreement was made, the cost of alternate systems were quite prohibitive, Mr Martyn said.
Several representatives of large and small processors who spoke with Fairfax Media, on the condition of anonymity due to commercial sensitivities, said a high level of integrity was maintained in the meat grading business and it was in no way in the interests of a processor for inconsistencies to exist.
They pointed out the majority of offal goes to international markets and the margins were not always positive.
Informed producers compare and contrast constantly, so the fact many opt to sell over the hooks indicates it is in fact one of the best options, one representative said.
Mr Martyn said livestock trading happened in a commercial market place and depending on where a producer was located, there were various selling options.
“One of best paths for a producer is to get to know your processor well and where they are marketing their product, and what their requirements are to maximise returns,” he said.
“Better communication between all sectors of the supply chain is important - the better the communication the less misinformation out there.”
While CCA is pushing for greater scrutiny inside plants and the ability for the producer to monitor his or her product until it is finished being processed, it says the key is technology development to achieve objective measurement and that was very close to being a reality.
CCA’s David Hill said producers had noticed in the past four to five years a decline in dressing percentages.
But there were distinct reasons - most plants were now Halal accredited, which created the need for more trim, and boning room yield now dominated for boxed beef production so processors were trimming to the maximum level allowed, he said.
“In Australia, dressing percentages are averaging 52 to 54pc while in the US that is 62 to 64pc,” he said.
“But the standard carcass differs - in the US it includes kidney, channel fat and skirts so it is not a matter of comparing apples with apples.”
He said company payment of graders had been acknowledged as a mistake, given the angst it had created.
However, the reality was ‘soft’ grading occurred as much, or more, than the reverse and that too had inherent problems, he said.
“Producers get a false idea of the performance of their product and it also impacts on the consumer’s perspective,” Mr Hill said.
“We are not far off objectively grading - the industry has been moving towards that for some time and that is seen as the ultimate objective.”
