View to a kill
Times are tough for large abattoirs, with profitability and supply both hard to come by. But a more positive picture is emerging for flexible, smaller slaughterhouses and the whole sector is collectively exhaling following the government's rejection of full cost recovery for meat inspection.
While the proposal by the Food Standards Agency (FSA) to introduce full cost recovery of its own auditing services has perhaps been one of the most contentious topics in the abattoir sector over the past year, other issues gathering momentum include animal welfare and religious slaughter.
Foremost in the minds of many large-scale plants supplying the multiple retail sector, however, is keeping afloat amid a climate of high raw material costs, but weak disposable income for consumers.
Recent months have seen a spate of UK plant closures, including Daysdrove in Shropshire, two Welsh halal processors and Orkney Meat's Hatston abattoir.
Jim McLaren, chairman of Quality Meat Scotland, was warning of 'wafer-thin' margins for Scottish processors prior to last month's shutdown of the £4m state-of-the-art Caithness Beef and Lamb plant at Wick before it had even opened.
"Like most businesses, times are hard and, for slaughterhouses in general, these are really very challenging times," says Stephen Rossides, director of the British Meat Processors Association (BMPA). "Prices are high, supplies are tight and exports are strong while, on the other hand, times are tight for consumers and meat is a high ticket product.
"Supermarkets are competing very hard, and it's not an easy place to be."
Extracting maximum value
The trade is "doing a lot of business but not making a lot of money", adds Rossides, with the impact of tough economic times varying business-to-business. Viability can rest on, for example, abattoirs' ability to extract maximum value from the fifth-quarter, he says.
Technology has a role to play in helping abattoirs maximise the value from carcases and, recognising fifth-quarter potential as the tipping point for some struggling abattoirs, Freund UK a German equipment supplier with a base in Dorset has just introduced a new unit aimed at reducing Category 1 waste.
Forming part of Freund's fifth-quarter processing line, its Gut Shredder is designed to shred and wash pig, lamb or beef guts, and can be programmed to, for example, run a five-minute cold wash cycle reducing waste by 40% and eliminating bloating.
Further programmes can take even more waste out of slaughterhouses, while a full steam/cook wash programme has the potential to convert Category 1 into Category 3 waste.
"In these challenging economic times, we are being asked by many of our customers to look at ways to reduce costs," says Ashley Fox, Freund UK managing director. "This product has a very quick payback and allows the abattoir to control costs that have traditionally been very expensive for them."
According to Fox, with the cost of Category 1 removal running at around £60 per tonne (t), a medium-sized abattoir disposing of a conservative estimate of 10t per week and achieving a 40% reduction through use of the Gut Shredder would save an annual £124,000.
Investment and flexibility
While some abattoirs are struggling to make a margin, others are faring better, with investment continuing across the board, while many smaller slaughterhouses are finding their greater flexibility a competitive advantage in the current economic climate.
Earlier this year Morrisons unveiled a £21m investment to increase capacity at its Colne abattoir in Lancashire, while Irish processor Dawn Meats has continued to expand with the purchase of Devon Meats, and £1.3m in Scottish government funding has been secured for a new abattoir in the lowlands of Scotland.
"Like a lot of industries, it is continuing to consolidate," says Rossides. "Some businesses have found consolidation and acquisition easier than others."
For the Association of Independent Meat Suppliers (AIMS), meanwhile, small- and medium-sized plants' greater flexibility and adaptability offers an advantage over larger abattoirs lacking the same freedom. "The whole independent sector has come through much better than expected," says Norman Bagley, policy director at AIMS. "There have been very few business failures. There have been challenges but the sector is able to duck and dive and get on with it." AIMS also reports an improved employment situation in recent years, with better staff retention.
Independent abattoirs are seeing strong sheep and beef exports, as well as domestic contract slaughtering and boning. "Slaughterers and further processors supplying top-end domestic markets have done well as major retailers increasingly rely on mince for volume sales, leaving top-quality cuts and the whole local/provenance agenda to the independent sector," says Bagley.
AIMS has also found that, in the English and Welsh markets it represents, a buoyant situation for farmers has resulted in stabilised production. "The service provider ethos has become very strong," says Bagley. "Producers are getting further up the food chain without owning an abattoir."
According to Bagley, the independent abattoir sector has also seen less impact from tight supplies. "We don't have those concerns," he says. "Capacity has been lost at the bigger end of the market and it's the bigger factories closing."
AIMS members' share of pig slaughtering has risen from 17% to 27-28% in recent years, representing not an increase in throughput, but taking a greater proportion of what is left, he says.
For BMPA, however, Rossides says: "Adequacy of supply is a real concern, despite pretty good prices. We want to see farmers profitable in themselves and expanding, so the overall situation of material supply is upheld."
Meat inspection debate
One development welcomed by the abattoir sector across the board, meanwhile, is the government's rejection of FSA meat inspection proposals. "We don't object to the principle of full cost recovery," says Rossides. "We want a review of the delivery system."
BMPA and AIMS are among industry bodies collaborating on a proposal for the shape delivery should take, and will imminently publish a document outlining their suggestions for implementation of the Macdonald Task Force recommendations.
"We know EU legislation is very rigid when it comes to meat inspection, but hold the view that current meat inspection is not as cost-effective as it could be," says Rossides, with BMPA taking the view that plants should be able to source delivery from the marketplace.
For AIMS, says Bagley: "We mounted in my view a very successful wrecking campaign, based on the facts, and ministers agreed. "Ministers have looked at FSA proposals for charging the full cost and told them to go back to the drawing board. That's not surprising when you consider that the elephant in the room, employee's terms and conditions, have never been truly addressed. For years we have been promised that a deal with Unison was 'just round the corner', but no such ground-breaking deal has ever emerged, in contrast with many other state sector operations.
"Couple that with duplication of back office operations, with the now single supplier under the new contract, and you can understand why ministers scoffed at the notion that industry should pay the full cost when inspection was not only inefficient, but adding little value."
AIMS believes Macdonald was badly treated when presenting to the FSA Board "but it was not unexpected, as defending the Agency's monopoly trumps all," says Bagley.
"An all-industry document articulating a way forward is imminent as it is incumbent on us to articulate a way forward which is affordable to industry and mitigates costs to tax payers," he continues. "We will deliver full cost recovery as and when proper risk based controls are implemented but until the FSA has negotiated new regulations, it is only fair it shares the cost. It is not a subsidy to industry, but it is an incentive to the Agency."
Bagley says any changes would be at least a few years down the line but, if implemented, the document's proposals would reduce public money going into meat inspection. "Our plans would take us from here to there at a lower cost, with better public health protection," he says. "All we have now is an audit system, largely carried out by inexperienced vets, who are responsible for health-marking the meat being produced in the premises they are auditing. There is no proper independent third-party audit system.
"The industry document will propose putting the Macdonald recommendations into action as a first step along the road to outsourced meat inspection and independent audit."
Issues in the abattoir sector, from sustainable supply to meat inspection, are, of course, tied to EU funding mechanisms and regulations, including reform of the Common Agricultural Policy and an ongoing review of food hygiene legislation.
Of more imminent bearing is the new EU strategy on animal welfare, with its timeline of compliance to be met by industry from 2012 to 2015. "We're not quite there yet," says Rossides. "There is still a bit of work to do and time is passing, but our members should be well-placed. We're working with Defra on that."
While Rossides welcomed the FSA's animal welfare survey as showing a good level of compliance by industry, he said welfare was an issue the industry should never again be complacent about.
AIMS also highlights a commitment to animal welfare among its members, but believes introducing CCTV in abattoirs as proposed by animal rights bodies is unnecessary. "The CCTV issue is not the panacea for better welfare controls that people think," says Bagley.
Kill line kit
Freund has introduced a line of Electric Stunners, designed to comply with the new EU regulations. Its Electric Stunners offer constant amperage, delivering the exact current required within 300 milliseconds according to the resistance of the animal. The EU regulations require the stun to be delivered within one second. Safe for operators, with a low sensing voltage of 20v that will not rise on human contact, the unit can record up to 6,000 stuns at a time or have stun data fed directly to a PC.
The stunners can be tailored with up to seven programmes meeting the demands of the weight and resistance range of lamb, sheep, pigs and sows, with a further function allowing adjustment of the frequency in three different stages during the stun, thus reducing blood splash and improving meat quality and yield.
Featuring 'head-only' and 'head/heart' functions, the units display the amps and volts and, in accordance with the EU regulations, include a 'stun end time' acoustic sound and 'stun error' warning lamp.
"Freund recognises how important it is for abattoirs to get the stunning right," says Fox. "Animal welfare and meat quality are essential aspects of the industry. The Freund stunner has been designed to meet the requirements of the EU law and our electrical stunning engineers offer full set up and ongoing support to all our customers."
Freund also offers a 'Stun Check' service to ascertain if plants' stunners meet EU requirements.
The issue of non-stun religious slaughter is, meanwhile, also linked into discussions over wider animal welfare and is set to gain momentum following Agriculture Minister Jim Paice's announcement of a review under the new EU regulations relating to the protection of animals at the time of killing to be implemented in January 2013.
Developments in IT can help slaughterhouses gain those all-important efficiencies linked to sustainability and even viability.
A carcase inspection application run on mobile or fixed position touchscreen PCs is the latest addition to Leicestershire-based Emydex Technology's hardware-independent full software solution for abattoir data capture and data management.
Inspectors can use the application to highlight the area of the carcase with faults, bringing up a selection of hot shot buttons identifying possible faults. "As many faults as required can be recorded against a carcase and all faults are recorded in the quality control database," says Peter Kettell, UK general manager of Emydex Technology. "If the numbers of faults of a particular type that are recorded exceed a pre-set parameter, the system can force action to be taken before the line can continue."
Emydex is a Dublin-headquartered software company specialising in shop floor data capture and production management systems, including meat and poultry primal and retail processing. Its abattoir data capture and management system runs on any Microsoft Windows-based device and uses the Microsoft SQL Server database management system.
"We believe that solutions should be modular, enabling the user to choose the options that best fit the requirements," says Kettell. "The four modules commonly used in the abattoir solution are kill line, livestock payments, carcase management and quality management. These can be installed with a standard configuration or customised to provide site-specific functionality. Configurations are available for beef, lamb and pork."
The Emydex kill line module offers full traceability, spanning livestock procurement, with livestock bookings made against a calendar for delivery to the lairage, through to passport scanning on receipt, lairage density reporting, EID/ear tag reading at sequencing, weighing and grading.
"Emydex has much experience in integrating automatic grading systems and RFID (radio-frequency identification) into our abattoir solutions," says Kettell. "Such functionality can be implemented as required. Via optimised weighing and labelling software, Emydex lamb kill lines are able to operate at up to 800 carcases per hour."
Suitable for both self-contained businesses and cost centres in larger plants, Emydex's carcase management module covers carcase chill stock, carcase sales and into boning. "A unique feature of the module is a carcase splitting engine, which automatically derives the remaining cuts/weights in chill when only part of the carcase has been dispatched or sent to boning," says Kettell. "Carcase rules are also used to set up the specifications of carcases that can be used on individual sales order or boning hall batches. This optimises the uses of the carcases in stock."
Kettell says use of the full Emydex software solution for abattoir data capture and management offers operators a real-time view of abattoir profitability, including costing for individual animals, lots and daily levels. "Chill efficiency and optimum carcase selection for production or sales enable profit leaks to be identified and action taken," he says.
Staffordshire-based Systems Integration, meanwhile, supplies the Integreater enterprise manufacturing execution system, aimed at helping food businesses achieve greater accuracy, efficiency and traceability. A complete software and hardware system, Integreater is available in a modular design to which additions can be made at any time, and is compatible with most common business software.
"Our Livestock Suite is aimed at helping abattoirs to meet legislation, as well as improving productivity and profitability," says Jodie Taylor, marketing executive at Systems Integration.
The Integreater Livestock Suite addresses regulatory requirements for traceability, including accurate identification, selection, weighing, grading and labelling of all livestock and carcases and veterinary conditions.
The Suite enables real-time monitoring, capturing livestock data from delivery through to despatch, while Integreater's web-based Livestock Tracker measures important factory-floor data, ensuring management has complete visibility and control of the slaughter process. To support operations, the bookings, management and payments system automates complex and time consuming administrative tasks.
Operators are quickly alerted to any potential issues, minimising disruption, while the system also ensures abattoirs are compliant with industry regulations and can easily supply electronic data to relevant authorities as required.
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