Beef boss blasts carbon tax burden

14 Nov, 2012 01:23 PM

A MEETING of agribusiness leaders in Brisbane today has heard a damning assessment of the Gillard Government's carbon tax on beef export performance.

John Berry, who represents Australia's largest meat processor, JBS, told delegates at the Australian Farm Institute Ag Roundtable conference in Brisbane that the bottom line of the company had come under extreme pressure since the tax's introduction on July 1 this year.

Mr Berry said the export business was at its toughest in living memory due to the historically high Australian dollar, a high cost of production base and rising input costs, some of which had soared as a direct result of the carbon tax burden.

Mr Berry said that as an "energy intensive, trade exposed' business, the meat processing sector should have been eligible for permits by the federal government and offered genuine incentives to develop carbon mitigation projects.

Carbon emitters currently pay $23 a tonne of carbon released in operations with carbon emissions of more than 25,000 tonnes a year.

For Australia's largest abattoir like JBS's Dinmore plant on the outskirts of Brisbane, where it emits nearly 80,000 tonnes of carbon a year, that's a slug of about $3.3 million a year from the combined costs of the carbon tax and higher electricity prices.

Mr Berry has been a long, outspoken critic of the carbon tax, arguing the it will create a two-tiered meat processing industry, with larger-scale abattoirs forced to pay the carbon tax without compensation and smaller operations are left alone.

Mr Berry said it was a cost burden the industry could do without, especially given the current international market volatility where 80 per cent of JBS's Australian product is distributed.

Mr Berry's attack on the carbon tax and his criticism of the Federal Government undermining export performance, comes as Trade Minister Craig Emerson and his department officials cop criticism from the beef industry for a lack of urgency in completing the Australian Korean Free Trade Agreement, which they say puts Australia's third biggest beef export market at extreme risk.

JBS has publicly shown its vulnerability to this year's difficult trading climate, when it terminated its boutique King Island facility in Tasmania in September citing skyrocketing utility and freight costs as the reason for the closure.

Other parts of the JBS business have also come under pressure, all in the southern region of its Australian operations. Another abattoir at Yarrawonga in northern Victoria is shut, as well as the Yambinya feedlot in southern NSW.

In April, JBS Australia shut its Prime City Feedlot at Tabbita near Griffith, NSW which had 63 employees, and downsized its nearby Riverina Beef at Yanco, which employed 95 people.

Processing 1675 head a week across nine shifts five days a week, the Dinmore plant is twice as big as the nation's second largest abattoir and currently emits 75,800 tonnes, although JBS management has a plan to slash the figure to 35,000 tonnes.

Mr Berry said that nationwide, Australian meat processors had already collectively spent $26 million in capital costs for carbon mitigation projects, but most would not a realise return on their investment for at least a decade.

Under a revised Federal government scheme that was brought in after the carbon tax was introduced, processing plants can receive dollar for dollar funding on carbon mitigation projects.

One plan JBS is working on is a $10 million green power scheme for its Dinmore plant. The project would capture bio-gas emitted from decomposing waste products, with the gas then used to power electricity generators at the site.

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15/11/2012 5:42:24 AM

Doing the Maths. 1675 hd/wk x 48wks/yr = 80400 hd/yr 75800 ton per year / 80400hd/yr = 0.94 ton/hd Ummm 940kg of carbon being made from animals that weight less than that is a pretty crazy figure. Last time JBS was in the stock journal it was about less than a 10th of this. In stead of the carbon cost being $20ish per head it was less than $2 per hd. Can the reporter or JBS please check these figures.
15/11/2012 9:10:02 AM

ummm, they kill more than 80000 hd per year, that is only one plant. and even that figure is probably shy of actual thruput. JBS accounts for around 17% of our total beef slaughterings so the figures indicate they will have a high tax bill.
practical farmer
15/11/2012 9:52:55 AM

This figure is obviously a misprint - my guess is that the figure would be nearer 16,750 per week. (Approx 3000+ per day)
15/11/2012 10:35:48 AM

So if they are out by a factor of 10. They are whinging about $2 per head. Is that right? Plus the increase in electricity bills which is mosty not due to the carbon tax and mostly do to upgrading powerline etc and other factors.
15/11/2012 11:57:31 AM

To Brad Cooper or JBS. Can we get these figures: Carbon cost in $ per head excluding electricity? A cost in $ per head for increased electricity prices. How much as a % this increase in electricity price is due to the carbon tax and how much it is due to other factors. thank you.
15/11/2012 12:22:04 PM

practical farmer: Your right, max through put at Dinmore is slated at approx 3000/day.
15/11/2012 2:20:14 PM

Based on what JBS has done to our industry with it's over control and then closure of feedlots etc. I think they should be careful about their glass house before they start complaining and throwing stones. They have never been able to keep their circus going and never will as they do not have good enough people to run it. They sack people weekly and have no idea what they are doing then complain and blame government, amazing..
15/11/2012 8:07:02 PM

Why not claim the carbon criedits on all 1675 head a week that have stoped emitting.That must be saving hundreds of tons of emissions a week x 52 weeks = they should be making money on emissions


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Pleased that common sense has prevailed. Being close to the policy makers cannot be underestimated
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JohnCarpenter, The lamb and mutton job is going okay- we must be doing some things right.
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Spot on X. Let the Chinese buy as long as we can buy freely in China