Tom Maguire Teys Australia’s general manager corporate services was one of the guest speakers at the recent ABARES Outlook 2018 conference.
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He urged existing industry groups – including the Australian Meat Industry Council and Cattle Council of Australia – to make drastic changes for better representation where all sectors of the beef supply chain work together.
During his presentation he said in Australia it costs twice as much as in the US to process beef and three times more than in South America.
Plus when it comes to feed conversion rations, beef takes a lot more feed to produce (7:1) than pork (4:1) or chicken (2:1).
“It means we must be doing a really good job in those high value markets around the world if we are going to be here in the long term,” Mr Maguire said.
Teys has made huge changes over the past seven years to remain competitive and viable within the market but Mr Maguire questioned what changes industry associations had made in that time.
“Things haven’t moved on in a way we want to see from a meat industry perspective,” he said.
According to Mr Maguire, Teys processes between 20 and 25 per cent of all Australian cattle at six beef processing plants, including one at Tamworth.
The company also have feed lots that meet about one third of their needs.
The past six and a half years, since its merger with Carghill, have been focused on change.
“The business has started to move from something that’s selling commodities to something that’s really focused on providing solutions for customers,” Mr Maguire said. “There’s centre of the plate options, plus some alternatives to roast chickens that people pick up from the grocery store.
“[Teys is] heading more and more in that direction and we are doing that to survive because we can’t afford to be in that commodity business any more.
“We are working with beef producers to bring them along for this journey – if we done have cattle producers working with us and opportunities in the supply chain, we can’t do this.”
Before starting with Teys, Mr Maguire said he worked for the Australian Meat Industry Council (which has been through various different name changes over the years).
There's no good in having organisations representing cattle producers, lot feeders, processors, we need to work together because we are serving a customer at the end of the day.
- Tom Maguire, Teys Australia
He said he believes industry associations do have an important role.
“There are things we can't control outside the business,” Mr Maguire said.
“Government induced costs and charges are a really big issue. Labour is a critical issue in Australia where you've got shortages in lots of towns. Utilities costs - our bill for utilities is going to be around $36 million this year. And market access.
“They are the sorts of things an effective industry association can get on top of.”
Mr Maguire said all these problems were issues 18 years ago and still haven’t been dealt with.
“So how well have we done advocating our issues?,” he said.
“An effective industry association could really help bridge that gap. AMIC represent less than 50 per cent of the beef industry. We've had Senate enquiries and years of debate over does the Cattle Council (of Australia) represent anyone at all.
“The point is [they] are not helping industries adapt to change. Industry associations love to fight in the media.
“But what message does that send to producers about the trust they have in their own supply chains? It's that trust that we rely on to run our business.”
Mr Maguire said it was time for something different.
“We need to move forward in a consumer or customer lead way and we need to do it together as a supply chain,” he said.
“There's no good in having organisations representing cattle producers, lot feeders, processors, we need to work together because we are serving a customer at the end of the day.”
He underlined the importance of the beef industry to Australia and said much of the industry's competition and opposition – including animal rights lobby groups – had made changes and were more effective than our current industry groups.
“We need effective bodies to represent what our industry does well and we need to come together to do that,” Mr Maguire said. “I hope that this starts to generate some debate among those who earn a living out of the industry.”