AUSTRALIA-MEAT PROCESSORS GET IT TOUGH.
Kyneton processor Gary Hardwick sees one knock-on benefit from the global financial crisis - an increased labour supply.
Abattoirs such as Hardwicks have always struggled to compete for labour against manufacturing and mining.
Now the tables appear to be turning as these industries shed staff.
Mr Hardwick is the first to admit the meat processing sector is always a tough, competitive battle, regardless of the economic climate.
"Otherwise, we are finding ourselves very busy at the moment," he said.
Nevertheless, the global crisis has thrown up its challenges for the domestic trade, with the crash in the hide market cutting the processor’s margin by $30 a head.
That margin is made up by lifting the price of the product to retailers or by cutting the price to livestock producers.
"I guess in these times it is the farmer who is squeezed the most," Mr Hardwick said.
One of Melbourne’s more successful butchers, Frank Russo, who operates his Rainbow Meats outlets in the eastern suburbs of Chirnside Park, Camberwell and Chadstone, says business has remained brisk.
"Last week, in fact, all three stores had record sales," Mr Russo said.
He put that down to a return to cooking and eating at home, rather than dining out.
Mr Russo said his sales were strong across all meats.
"We haven’t yet got to the point where our customers are opting for the cheap cuts," he said.
However, another butcher who operates in Melbourne’s northern suburbs, where unemployment is on the rise, described business as "very ordinary".
This man, who wished to remain nameless, said his business was getting by only because of the supply of boxed beef from the north.
Many of these boxes of primal cuts, such as porterhouse, had been destined for the export market, he said.
But, for some reason, they were being "dumped" or discounted on the domestic market.
Mr Russo said that, like other butchers, he had tapped into this supply of northern beef.
In his case, though, he looked for product with an Meat Standards Australia grading.
Mr Russo said he believed most "butt" cuts were selling well on the export market.
But while it appeared to be business as usual for processors and retailers, cattle producers continued to be losers, with no help from the domestic market, according to Australian Beef Association director Athol Economou.
Mr Economou took a swipe at Woolworths over its recent donation of $5 million to rural Australia.
The donation was purportedly representing "a day’s profit" for the supermarket chain.
Mr Economou said that, in 2000, farmers received $650 for a domestic grade animal and the retail mark-up was $1100 a head.
"In 2007, farmers received the same money, while the retail margin - the mark-up from wholesale to retail - increased by $250 to $1350 per head," he said.
