Australian meat processors face another tough year

Faced with further job cuts and reduced production, Australian meat processors are projected to have another difficult year.

Cattle slaughter rates for 2010 is expected to drop 4.5%, taking throughput to the lowest level in 14 years.

This estimation comes after hundreds of slaughterhouse workers lost their jobs on the back of tough export conditions and a 3% drop in 2009 slaughters. MLA economist Tim McRae said this is the third consecutive year of falling slaughter rates, which will see just 7.4 million cattle heading to the slaughterhouses.

However, if conditions improve in southern Australia through autumn and winter, the number may be back 8-10%, said McRae. Not only is the processing sector facing a double-whammy of high Australian dollar and low export demand, there is also lower available cattle supply to put through the processing plants.

Still, live cattle exports are expected to increase 4% as strong Indonesian demand continues this year. Nearly one million head of cattle are expected to be shipped from northern Australia over the next year.

The figure is likely to fuel further union anger after the increased live exports are blamed for this year's spate of slaughterhouse job cuts.