Harvey Beef reward incentive
Harvey Beef has signalled paying its suppliers for yield and quality as it seeks more value from its customers.
During a speech at WAFarmers' beef conference last week, Harvey Beef general manger Wayne Shaw was asked by several frustrated suppliers about the Andrew Forrest-owned abattoir paying its suppliers for carcase yield and quality attributes the company is extracting as extra value from its markets.
Harvey Beef currently pays its suppliers on yield value by lot.
Mr Shaw had been invited to the conference to talk about the Australian beef cattle market with an emphasis on the WA market, where he told attendees about the company's $30 million investment in the Harvey-based processing facility to target China with high-value, premium beef cuts.
In response to questions by suppliers, he said he was prepared to "put his neck on the line" and commit to make it happen in the future.
"While a new payment system is not in our immediate plans, it is certainly a goal we want to achieve," Mr Shaw said.
"In my former role working with sheep in New Zealand, the company I had worked for had made progress down that road.
"We introduced an X-ray grading system there, largely for that purpose.
"I understand it's still not at the stage of being able to pay on the yield, but that's the ultimate aim for the system there."
Mr Shaw said Harvey Beef was working with Meat and Livestock Australia to develop a system that underpinned a yield and quality payment system.
"There is a trial under way at the moment for carcase X-raying of floor cattle, but it is difficult to establish the yield of the body and obviously we do it at the moment as yield by lot," he said.
"The change is several orders of magnitude more difficult to get that down to a per body capacity, although it's technically doable."
Mr Shaw said the company was also working on a Meat Standards Australia grading payment.
"This payment is potentially possible and I guess that is something Harvey Beef will be looking at," he said.
"I wouldn't want to put a date on it, but it is certainly something we see merit in."
Speaking to _Countryman _ after the conference, Mr Shaw said his company was about to launch a web-based portal for its suppliers.
"They will be able to access that (and it) would provide them with information to increase the value of their herd to us," he said.
"We are trying to increase value in some of our supply channels, and to do that we need to implement animal specification thresholds.
"Ultimately, it's about producers making informed decisions on their herd to deliver what we want and what the consumer is after. Improved communications is a key part of Harvey Beef's growth strategy."
Meanwhile, Donnybrook cattle producer John Fry, who attended the conference, said he was not convinced by Harvey Beef's talk about a better payment system.
"It is disappointing that a reward system did not appear to be part of Harvey Beef's immediate future plans," he said.
"Is there ever really going to be a plan to reward producers for saleable yield and beef quality because they are the two drivers of the industry?"
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