The report, released by the Australian Meat Processor Corporation, revealed that average cattle processing costs per head were 24% higher in Australia than in the US, while they were 75% higher compared with Argentina and twice as high as in Brazil.
It added that regulation and certification were the major contributors, with more than half the costs in Australian processing (excluding livestock purchase) due to some form of regulation.
Labour was also highlighted as a significant factor in cost-to-operate across markets. The report found labour-related charges made up nearly 60% of total operating costs in Australian facilities, compared with less than 50% in the other countries examined.
AMIC’s CEO Patrick Hutchinson said that intervention was urgently required to safeguard the future of the local industry.
“To remain viable, our industry has to be able to compete against key global players, including Brazil, Argentina and the US. But between government red tape, labour expenses and soaring energy prices, our costs to operate are far greater than those competitors,” said Hutchinson.
“It’s about finding the right balance. Our industry is proud of its track record around quality and innovation and, obviously, there are some costs associated with maintaining that reputation, particularly around regulation and certification and even in relation to staffing. But there are lessons to be learned from our competitors, and there are opportunities to look at doing things differently.”
According to AMIC, Australia’s red meat processing sector was estimated to have contributed over AU$21 billion in the year 2015/16, including over $8 billion in household income and nearly 130,000 jobs.