Dirty deeds done dirt cheap
In part three of the Mycoplasma bovis series, Nicola Dennis looks at the impact of the eradication programme on meat processors.
I contacted the Ministry of Primary Industries (MPI) several times to clarify some details regarding the slaughter of the 180,000 cattle that were “depopulated” during the Mycoplasma bovis (M bovis) programme. The ministry responded by lodging official information act requests on my behalf.
So I guess I am almost a journalist now.
I had much more luck cold-calling all the major meat companies and asking them if they would, pretty please, tell me what it was like processing these animals? And would they be well placed to do it again?
In some cases, memories were a little hazy. After all, the depths of the M bovis cull was pre-pandemic and many crises ago. But I think I have done a decent job of piecing together a consensus.
HOW MEAT PROCESSORS WORK
To understand the meat processor perspective, we need a basic understanding of how meat processors arrange their business. If you are the kind of person who believes that they all collude in a caviar-filled board room somewhere to laugh maniacally at your expense, then go ahead and skip this bit.
The processing game is all about keeping the factory running as close to full capacity as possible. Processors have huge fixed costs. A meat processing plant is usually millions of dollars of conveyor belts, boilers and freezers housed within ageing factories that barely keep abreast of the growing pile of environmental and safety legislations.
To make the most of these fixed costs, meat processors want to process as many carcases as possible. The processing plant must be kept busy to make fighting for all the resource consents worthwhile.
However, none of this happens without a large supply of hardworking staff. Meat companies were worrying about staff shortages long before it became trendy. The staffing level has to be carefully balanced. There needs to be enough staff around to get the stock processed efficiently, but each staff member needs to be getting enough workshifts to make it worth their while. Otherwise they will find another job elsewhere.
To keep the staff well fed and the machinery humming, there needs to be a steady flow of stock coming through the plant which, of course, never happens. There are periods where everyone wants to kill their stock at once (i.e. leading into winter for cattle and during summer for sheep) and when very little stock is on hand (i.e. the depths of winter), as well as the less foreseeable ebbs and flows caused by floods and droughts, and too much or not enough grass on farms.
So meat processors spend a fair bit of time either begging for stock or hearing farmers beg for killspace.
To make it all work, the meat company strategy is to pay farmers as little as possible when processing capacity is overwhelmed (i.e. too much stock to process) so that they can lose money fighting tooth and nail with their competitors to buy enough stock to keep things running when processing capacity is underutilised (i.e. livestock is scarce).
TIME IS MONEY
If you are in the business of making the most out of stainless steel and staff, then speed matters. You have to crank through as many animals as possible in each shift.
You might think that the meat companies rubbed their hands with glee at all the extra stock coming in from the M bovis eradication programme. But no, infected cattle were more work than they were worth. Once a processing plant had received animals from a farm deemed infected, then it was essentially an infected property itself. Cattle that came into that plant afterward could not leave, which meant that other clients’ stock could not be returned home (which occasionally has to happen if inappropriate stock has made it to the plant), or surplus stock could not be relocated.
Cattle trucks required up to two hours of disinfecting between loads. And there was a lot of paperwork and stock shuffling taking place behind the scenes to make sure the meat companies did not become a source of infection. They didn’t go as far as disinfecting the company cars each day, but the idea was certainly mooted.
Picking up bobby calves from infected farms was a regular logistics challenge. The calves required their own fleet of trucks, or had to be left until the end of the run so that they didn’t go tiki-touring around a bunch of not-yet-infected farms.
Good, you might say, that is exactly the way it should be. But it slowed down plant throughput and that meant processors were cagey about who they were prepared to take infected animals from. If you weren’t a loyal customer of the company in question then you could tell your sad story walking. And even then, there were times during the drought and during the pandemic when processors could not make it work. In those cases, MPI tells me, it had to rely on pet food companies.
SIZE MATTERS
So speed matters, but so does the size of the stock. There is a reason why your processor has carcase weight limits. High-value meat items need to be a uniform size and quality. You don’t go to a restaurant to see the table next door getting a steak twice the size of yours.
For the most part, the international customers were unconcerned about NZ’s M bovis troubles, since every other major beef producing country lives with the disease. But that didn’t mean that anyone was in the market for a limited-time offer of tiny, lean steaks from yearling cattle. Processors ended up killing a lot of under-grown stock which yielded little more than low-value grinding beef. That was kind of a bummer, because these animals cost almost as much to take apart as a much more valuable 300kg prime steer carcase.
From a practical point of view, there are size limits for the cattle chains. One company wouldn’t accept cattle under 140kg liveweight, while another had a strict no R1 cattle policy.
Pint-sized cattle carcases are an odd size and if they go through the cattle chains they dangle up in the air where the staff can’t reach them. If you were to put them through the sheep chains (like the bobby calves) then they would drag on the ground.
The awkward “not a bobby calf, but not big enough to pretend to be a cow” cattle had to be processed via pet food operators. But I have to wonder how the pet food operators managed to process the odd-sized cattle efficiently and humanely. Are pet food processing staff taller?
PROCESSOR COMPENSATION
During the processing of M bovis cull stock, processors incurred costs from lost time/throughput while dealing with the quarantine aspect of infected mobs and also lost profits from processing underdone cattle. And since you can only eat an animal once, there was also the opportunity cost of processing cattle before they had a chance to grow enough meat to make it worthwhile. The sheer wastage of it seems to be the most distressing element for processors and plant staff who never signed up to turning “healthy” yearling cattle and pedigree dairy cattle into mincemeat.
Processors tell me that they were compensated for lost time and margins. Curiously, the MPI compensation team rang me to specifically dispute that they paid processors anything. I said I was pretty sure they had – why would processors do it for free, and then lie to me about it? MPI said they would go check and ring me back. And then, the “Tena koe Nicola, thank you for your official information request” email popped into my inbox. I look forward to the fruits of that harvest sometime within the next 20 working days.
COMMUNICATION
So far, the M bovis series has been littered with accusations of poor communication from MPI. But the processors seem pretty happy with their lot. Their plants are crawling with MPI officials on a good day, monitoring, justifying and notifying all the goings on.
Was the Government’s decision to cull more than 100,000 animals a bolt out of the blue? Sure, but MPI was quick to come to them to discuss how to go about it. And it seems like there was leeway for processors to negotiate their terms. Or processors aren’t going to spill the tea on the government department that haunts their premises. Or it all pales in comparison to the recklessly poor communication processors are enduring from Fonterra at the moment (see bobby calves).
COULD THEY DO IT ALL AGAIN?
M bovis was a fairly unique situation. If a disease is bad enough for a full government crackdown, you usually don’t funnel all the infected animals into the food chain. If, heaven forbid, one of the major villains such as foot and mouth or mad cow disease got into the country then infected stock would be bonfired rather than barbecued. That being said, there is a long list of livestock diseases that NZ proudly proclaims itself free from. Among the scary villains such as anthrax, scrapie and rabies, there are some descriptive odd-balls like bluetongue, lumpy skin disease, heart water, and the “new world screwworm”. I won’t pretend to know anything about these diseases, but I guess that some of them could fall into the ‘’let’s eat all our mistakes” category.
But meat processors aren’t well set up to weather another M bovis type event. The pressures on farming have meant that stock numbers have dropped off. Forestry conversions have eaten up the sheep breeding grounds. Calf rearers have been progressively kicked down by M bovis, Covid-19, inflation and labour shortages. And environmental regulations are putting the squeeze on everyone else.
Usually this would mean that processor staff would be scratching around for things to do, but there aren’t enough staff. So processing capacity has fallen faster than the stock numbers, which is keeping things in a fragile balance. A bulkload of unmarketable stock would be really unwelcome right now (see also bobby calves).
I asked about robots. They are supposed to take all our jobs anyway, aren’t they? They can be great for processing poultry and pork, which are very uniform in size, but they aren’t an easy sell for processing red meat carcases which are much more variable. You can spend a million dollars trying to save one labour unit. But there are decent automation options for moving the processed product around the freezers and chillers which can free up some labour for processing.
They are making it work, “but please don’t release another disease into the country” was the message I heard.
DON’T FORGET TRACEABILITY
M bovis highlighted some dodgy dealings going on in cattle trading. There were enough people swapping calves for cash or services to cause a traceability headache. But even if all the i’s were dotted, it was clear that cattle skip around the country a heck of a lot. The Friesian bull trade was a major biosecurity weakness. There are good calves to be found in the South Island, but a better grass supply and better kill prices to be found in the North Island. So black and white bulls are often cruising on the Interislander. And they aren’t the only things sailing to the other side. Store lambs are going here, there and everywhere. That makes traceability all the more important.
So I couldn’t help asking a cheeky question about sheep – since nobody is keen to talk about tagging and registering them. What would happen if there was a M bovis-like situation for sheep? “God help us,” said one person. Another just audibly shuddered down the phone line and hoped that common sense would prevail.
The bobby calf bust up
FONTERRA IS A DIRTY WORD for meat processors right now. The dairy company giant has unilaterally decided that it won’t condone the on-farm slaughter of unwanted dairy calves. Apparently there is an underriding clause that states something like “wherever it can be avoided”. But most people are interpreting it as “unwanted calves must be reared or slaughtered” and since calf rearing is about as profitable as blackjack, it is quickly distilled to “unwanted calves must go on the bobby calf truck”.
Which leaves the meat industry wondering why the dairy industry thinks it can process an extra 600,000-700,000 of its unwanted calves. Bobby calves are not a particularly profitable item for processors. Sure, their pelts go for luxury leather, their meat for baby food and there are some co-products including serum and rennet, but they are baby animals with baby animal needs. They can’t be returned to sender or put on grazing. They must be dispatched within a certain timeframe or processors have to source them some milk. They are prone to infections. They need to be manually carried around. Their sizes are all over the place. One farm will try to send 9kg carcaseweight Jersey calves, the next will try to fob off a four-week-old calf they have grown sick of.
Overall, they are a high-risk low-reward stock that processors have been willing to tolerate because they keep the sheep chains busy during the lamb off season. But the lamb game has changed: we now get by on getting the most out of a smaller lamb kill. Staff are scarce, lambs are now a 52-weeks-a-year gig, and the bobby calves are already overwhelming the system. The processors say that the dairy companies have tried to talk them into extending their calf pick-up dates. But meat companies don’t have the capacity or the staff to accommodate what is essentially a clean-up job for the dairy industry. “We already have more calves than we need. This season we had to close the bobby calf books at 41,000 calves per week,” said one procurement manager. “This doesn’t seem like a well thought out plan from Fonterra.”
