A long-term, ongoing shortfall in slaughter cattle supplies to Tasmania’s two major abattoirs has cast doubt on the viability of a proposed new King Island works.
The King Island Beef Producers Group invited the EAT Group, a Melbourne-based agribusiness firm, to set up the abattoir.
JBS operates a works at Longford, northern Tasmania, and southern chief operating officer Sam McConnell wished the EAT Group luck.
“Tasmania already has two strong processors, producing high quality products,” Mr McConnell said.
“Tasmania already imports 1200 trailers of processing cattle by ship each year, and if a third party believe they can capture adequate numbers for a viable processor then we are doing something very wrong.
“But still there are people who don’t believe, and they will quickly learn how costly it is to process beef in this country.”
Tribunal green light
Tasmania’s planning tribunal recently overruled an appeal against the $53.5 million project.
The Resources Management and Planning Appeal Tribunal ruled against appellant Raff Angus, which objected to the King Island Council and Environmental Protection Authority granting a planning permit.
The Raff family was one of nine objectors to the proposal.
- Read more: Tribunal hears works fears
- Read more: Planning tribunal rejects King Island abattoir objections
But Mr McConnell said JBS would continue to support its producers.
“Anyone can do what they like if they have the money,” he said.
Page Transport managing director Geoff Page confirmed 48,000 head of cattle were being imported to Tasmania each year.
He said since 1979, Tasmania had been a net importer of slaughter cattle.
“I think there is a critical mass of a daily number of processing animals the abattoirs need,” Mr Page said.
He said between 35,000-40,000 head of cattle came off King Island each year, with about 30,000 going for direct processing.
Of that number, between 16,000 and 18,000 would be prime beef cattle; the rest are cows and bulls.
Mr Page said building an abattoir on King Island would make it hard to convince shipping operators to invest in upgrades, as carting cattle was a substantial part of their businesses.
“It’s an investment that’s a very uncertain one,” he said.
“In 18 months time, will there be anything coming off the island?
“We are very cognizant that part of our business may cease to exist.
“We won’t be buying, or putting any more equipment into the trade, with that uncertainty hanging over our heads.”
Greenham livestock manager Graeme Pretty said there was a big difference between getting approval for the abattoir and finding funding to build it.
“I think it’s quite obvious the processing capacity in Tasmania is sufficient for the needs of Tasmania,” Mr Pretty said.
“There are still a lot of cattle being imported into Tasmania to keep processing plants and the employees of the processors in work.
“You have seen the processing of lambs happening outside of Tasmania, on the mainland, simply because supply is not consistent to keep a plant open 52 weeks of the year.”
JBS cited tight lamb numbers for the temporary closure of its Longford sheep processing line in September last year.
Mr Pretty said he couldn’t see any sense in the proposal for a new abattoir on King Island.
“You don’t have to be Einstein to work out Tasmania can only process a certain amount of cattle each year,” he said.
Red meat workshop participant Antu Angus’ John Tucker said while he was supportive of the King Island plan, he could also see the other side of the argument.
“We need throughput of stock, to keep our own Tasmanian abattoirs open,” Mr Tucker said.
“The State government needs to have a good look at the sustainability of our meat industry.
“We need bipartisan support, to make something happen to keep our meat industry going.
“At the present rate, 10 years down the track, we could have an industry where we are shifting everything across to the mainland for processing.
“I see the new abattoir as a benefit for the state, but it’s got to be sustainable.”
While Beef Group chairman Richard Sutton declined to comment to Fairfax, others were supportive of the project.
In its original prospectus, the EAT Group said it planned to sell 67 per cent of the business to outside investors, offering producers who signed up to supply it a share of a brand use licence fee.
The world’s largest processor, JBS-Swift shut the island’s former export abattoir in 2012, citing high freight and power costs and low profitability.
It was processing around 28,000 head of cattle a year, of which 18,000 were deemed to be prime stock.
At times, the company also had to import cattle to maintain throughput.
The new proposal abattoir was approved by King Island council earlier this year.
But five of the nine elected representatives, including deputy mayor Jim Cooper, declared an interest that they could gain a financial advantage, or suffer financial loss, if the plant was built.
That left the mayor and another councillor in the chamber for the vote, which meant the decision passed to the acting general manager Robert Ball.
It was also approved by the Tasmanian Environmental Protection Authority, which imposed conditions on its operation.
Island producer Simon Vellekoop said he was in favour of the abattoir.
“I wouldn’t want it next to me, but we do need an abattoir,” Mr Vellekoop said.
He said transporting stock off the island raised concerns about animal welfare.
“We have to put the cattle on a truck, all day, to get to the meatworks.”
He runs a 900-1000 breeder herd, half way between Currie and Cape Wickham.
“Ours go to Swifts (JBS) at Longford, they’ve been good too, we’ve had a pretty good run.”
But he said he remained sceptical about the construction of the new works.
“It’s a huge cost,” he said.
“I have to see it, to believe it.”
Roger Clemons said the “vast majority” of the island’s beef producers would supply the new works.
“It’s good for King Island,” Mr Clemons said.
The previous abattoir didn’t survive, because it had outdated technology.
Mr Clemons said he did not agree with an appeal against the project.
“If the council and the Environment Protection Authority have agreed, that’s how it should be.”
He also raised animal welfare issues, in taking cattle off the island for processing.
“I don’t really like loading cattle on a boat and sending them off the island – I’d rather put them on a truck and take them 20 minutes down the road.”
Another advantage cited by island producers was a reduction in freight costs.
They believe the island abattoir could save between $95 and $118 a head, in sea freight, and a return to a King Island stand-alone regional premium brand.
Tim Roberts-Thomson said his TRT Pastoral Group operated its King Island properties as an Angus cattle breeding and finishing enterprise, with 15,000 head and more than 6000 breeders.
Mr Roberts-Thomson said he felt it would be a positive move for the island.
“We have enormous freight costs with the cattle sent to either Tasmania or the mainland, and this would be a good alternative,” Mr Roberts-Thomson said.
Any new processor would have to match prices offered in Tasmania or Victoria.
“You would think if they need cattle, they are going to have to pay the market price and exploit their advantage.”
The properties currently supplied JBS, Greenham and the Tasmania Feedlot.
The EAT Group has been contacted for comment.