A beef animal leaves an abattoir as 250 different items.
Of these, there are about 100 that processors don't want, and 50 that are sold below cost.
Welcome to the reality of the meat trade.
While producers may struggle with the prices they get for their stock, it's not necessarily an easy road for processors either, who continue to trade in less than ideal conditions.
The strength of the Australian dollar for the past 18 months has made trading tough, as has the post-drought shortage of stock.
It has forced processors to pay more than they can afford to secure numbers.
They then have to sell this beef on a world market that is suffering the effects of the global financial crisis, or, as in Japan's case, the aftermath of a natural disaster.
Yet it's the quality of Australian beef that has allowed rates to stay where they are, according to one of the industry's major players.
This year, David Larkin was elected chairman of the Australian Processors Council.
He runs his own meat export business, and is in tune with the processing industry across the nation.
While he knows his peers well, he's keen for the group he represents to develop a closer and more transparent relationship with producers, with the aim of having each sector better understand the other.
That includes producers knowing just what they are being paid for, which is not only the prime cuts but the by-products, which sometimes cost the processor rather than earning income.
"We do get producers saying, 'Why are you paying 200c/kg when you are selling scotch fillet for $30/kg?" Mr Larkin said. "We need to get the message across that, when a beast comes into the works, there is a 50 per cent yield loss straightaway.
"Offal is 20 per cent, the hide is 10-12 per cent, and then 20-28 per cent is the gut.
"That 28 per cent costs us money as we need to dry out the blood, and so we get a negative return on that."
The remaining carcass is 50 per cent bone. When taken out during processing, the bone is worth just 40c/kg.
"The meat industry pulls apart a raw material and sells all of it - quite a lot of it we would rather not sell at all," Mr Larkin said.
"Producers need to think about when they do their own killers and how much of what they get do they really want."
Knowing more about what happens to a beef beast once it hits the abattoirs is something Mr Larkin is keen to share with producers.
He said processors he knew would like producers to better understand the next phase of their industry.
Part of this view comes from feedback from processors. Mr Larkin said this was invaluable for producers who wanted to maximise earnings from their cattle.
"If a producer looks at the feedback and sees an animal is discounted, he can work out why," he said.
"We don't want to discount animals - we'd rather not have them - and would ideally like to have animals that fit our specifications and grid."
Mr Larkin said there was still plenty to be positive about in the Australian beef industry.
First was the quality of stock, with Australia's beef widely regarded as the best in the world. That made pitching the beef slightly easier in a competitive environment.
But the National Livestock Identification Scheme was also a huge bonus for selling Australian beef.
Its value could not be underestimated, Mr Larkin said.
"The NLIS, the national vendor declarations and the whole-of-life traceability - I can't tell you how this underpins the security of markets," he said. "All of our customers, and their authorities and regulators who audit our plants, see the traceability as hugely important.
"It has been the saviour of many markets and we are very fortunate to have the professionalism in the Australian beef industry."
Producers might want more for their cattle, but Mr Larkin said it was time for any divide between the processing industry and producers to be put aside.
If relationships can be built, Mr Larkin believes Australia is in a prime position to become one of the world's major beef players.
"Landowners and cattle owners and processors in the future will be like the mining industry is now," he said. "We will have the resources (food) that people need."
Mr Larkin said producers and processors should work together for the betterment of the industry.
"We are not in the market to rip off the producers," he said.
"We want to engage with them in a professional industry so we can all survive and make money."
Source: weeklytimesnow.com.au
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