Cattle supply and abattoir study
The Department of Agriculture and Fisheries has commissioned an independent study into the Analysis of beef cattle supply and evaluation of commercial viability of locations for processing facilities in Queensland.
The Report is part of the Study Series: Improving the Queensland beef supply chain . These studies aim to inform investment in the beef industry across regional Queensland, providing current information that will inform Government policy and private sector due diligence and investment decisions
The Report provides a set of criteria to assess the strengths and challenges of establishing a new conventional export abattoir at 27 regional locations across Queensland.
The Report will assist proponents to self-evaluate the potential for establishing a new abattoir. It will also become a resource for government policy makers. This information will be of interest to local governments, proponents and existing operators.
The report provides:
- a set of criteria to assess the locational requirements for a conventional export abattoir
- an independent assessment of 27 locations across Queensland
- modelled earnings for selected sites
- sensitivity analysis of profitability over historical market conditions
- modelling of slaughter cattle supply
- assessment of Queensland’s existing slaughter capacity
Note: The findings of the report are limited to the model conventional export abattoir with parameters as described in the report. The findings of the Report should not be interpreted as ‘ruling in or out’ the viability of any specific project or location.
Download the executive summary.
Request a copy of the full report through our Customer Service Centre.
The report builds on and complements the previous study to Evaluate the commercial viability of a northern outback Queensland meat processing facility by further developing the assessment process and expanding geographic coverage from the Gulf and MITEZ (Mount Isa to Townsville Economic Zone) regions, to the entire state.
Frequently asked questions
What was the typical abattoir considered in this study?
The typical abattoir is an export-oriented, greenfield site with a minimum of 100 000 head throughput per annum, with a single shift per day, over a 5 day week, and chill boning operation. This capacity is normally accepted as the minimum throughput for a typical export abattoir to remain financially viable in the long term. However, there are many beef abattoirs throughout Australia operating beyond these parameters as discussed under the following question.
Can a new abattoir outside the scope of this study be viable?
A new domestic or export oriented abattoir, outside the parameters used in the model, may be viable if market access is assured; a niche market is established, producing novel/value added products; or costs are mitigated through a vertically-integrated supply chain.
What are the advantages, and disadvantages of an inland abattoir compared to the existing coastal locations?
An abattoir located inland from the coast would reduce cattle transport and shrinkage costs. However, inland locations may suffer from the following disadvantages:
- increased construction cost of abattoirs in more remote locations resulting in higher financing costs
- increased cost of delivery of packaging and consumables, typically supplied out of Brisbane or major coastal centres
- increased cost of external support services such as specialist maintenance contractors.
Do we have processing capacity in Queensland to deal with peak cattle supply?
The total Queensland beef processing capacity is 390 000 head/month, based on a single shift/day over a 5 day week. This capacity was adequate to cope with unusually high slaughter volumes of 2014 and 2015. For example, it coped with slaughtering of 415 500 head/month in July 2015, simply by adding extra shifts where required.
Any new abattoir proposal based solely on the argument of a lack of processing capacity is unlikely to be justified.
What was the basis of selecting the 27 locations for the initial screening?
The 27 locations were identified based on the expressions of interest by the local councils, individual producers and businesses. All locations considered in the 2012 study were also included, along with several central and southern locations, to provide an even geographical ‘coverage’ of the entire State.
Why were the locations, which failed the Stage-1 screening, included in the Stage-2 analysis?
The high-level assessment (Stage 1), which screened 27 potential locations, considered basic minimum requirements such as labour, transport, availability of water and power. However, some locations, which did not meet the parameter requirements, were also included for the operating cost model analysis (Stage 2) to provide geographic coverage of sites across the state. These include Innisfail, Charters Towers, Hughenden, Longreach and Charleville as a part of the 11 locations for the Stage-2 analysis.
Why was Roma considered as having 170 000 head throughput while others 100 000 head? Is it a fair comparison?
Roma is surrounded by several local government areas with the potential for supply of more cattle (up to 170 000 head per annum) than Emerald and Goondiwindi (100 000 head per annum). This comparison was done to demonstrate how higher throughputs result in lower processing costs per head, making the business marginally profitable. To ensure a meaningful comparison, Roma also was compared with Emerald and Goondiwindi at 100 000 head per annum throughput. At the lower throughputs, none of the three locations were profitable, after allowing for depreciation and interest or a return on equity.