Kangaroo Meat Industry Review

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                       Kangaroo Meat Industry Review
             Prepared by:       Russell Cummings
                                Strategic Business Development
                                PO Box 102
                                GARRAN ACT 2605
                                Phone: (02) 6282 4304
                                Email: rcummings@mindshop.com.au

                                                     May 1998

                                      TABLE OF CONTENTS

1.0 MEAT PRODUCTION FOR HUMAN PRODUCTION. .....................2

2.0 MEAT EXPORTS ..................................................................................3

3.0 SKIN EXPORTS .....................................................................................4

4.0 LOCATION OF KANGAROO WORKS...............................................4

5.0 PRODUCT PRICES & YIELDS ............................................................6

6.0 RECENT DEVELOPMENTS ...............................................................8




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1.0   MEAT PRODUCTION FOR HUMAN PRODUCTION.
      History

      In Australia there are over 3 million kangaroos processed each year with an industry
      worth of around $200,000,000 per annum. The industry over the past 10 years has
      been growing and has seen processing numbers increase by an average of 5% per
      year. ( Source: Kangaroo Industry Association of Australia)

      Human consumption (HC) is increasing with a higher proportion of the harvest going
      to this sector each year. In 1990 only 5% of the harvest went to the HC industry and
      by 1996 the figure had increased to 25%.

      The industry is controlled by way of Quotas which are set each year by a management
      committee which is made up of selection of people across the industry and the
      National Parks and Wildlife Service. The following table shows the Quotas for NSW.
      Note the 239,270 animal difference in 1997 and 1998. The quotas make sure that the
      Kangaroos are harvested sustainably, avoiding exploitation.

            Table 1:    1997 & 1998 NSW Kangaroo Quota Comparisons


                   Zone Name & No                          Total                   Total

                                                         Quota 97                Quota 98

                   Tibooburra          1                 138160                  203300
                   Broken Hill         2                 167660                  288650
                   Lower Darling       4                 128280                  129150
                   Cobar               6                  58910                   66500
                   Bourke              7                  53090                   77830
                   Narrabri            8                  48450                   96455
                   Armidale            9                  37500                   36645
                   Coonabarabran      10                  67900                  125250
                   Griffith           11                 201380                  119080
                   Glen Innes         13                  37500                   36650
                   Upper Hunter       14                  31600                   30190
                   Totals                                970,430                1,209,700




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2.0   MEAT EXPORTS - QUANTITIES & COUNTRY OF
DESTINATION

     Table 2, below, indicates the destination of Australian Kangaroo Exports. Total
     exports of both pet meat and human consumption for the 1997 year were
     4,744 tonnes. Approximately 8% of total production is exported and the majority of
     this for human consumption.

     Belgium was the top destination for Kangaroo meat products in 1997 comprising
     14% of the Export market. European destinations account for 3,172 tonnes per
     annum or 67% of the market.

     Table 2:   Kangaroo Meat Exports for 1997 - Pet and Human Consumption

      Destination                            Rank             Tonnes per annum

      Belgium                                  1                      650
      Austria                                  2                      508
      France                                   3                      391
      Great Britain                            4                      369
      Germany                                  5                      287
      Thailand                                 6                      239
      Netherlands                              7                      226
      New Zealand                              8                      210
      Hong Kong                                9                      202
      Russia                                   10                     193
      Spain                                    11                     189
      Indonesia                                12                     143
      Philippines                              13                     133
      Macau                                    14                     128
      Reunion                                  15                     118
      Japan                                    16                     115
      Italy                                    17                     110
      USA                                      18                     108
      Bulgaria                                 19                     101
      Czech Republic                           20                      76
      China                                    21                      65
      Papua New Guinea                         22                      32
      Cyprus                                   23                      29
      Malaysia                                 24                      26
      Singapore                                25                      22
      Switzerland                              26                      21
      Sweden                                   27                      21
      Vietnam                                  28                      20
      New Caledonia                            29                      9
      Zimbabwe                                 30                     0.1

      TOTAL                                                          4744




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3.0   SKIN EXPORTS
      Skin exports for part 1997 are summarised in Table 4 below. Key markets for
      Kangaroo pelts are India, New Zealand, Japan and Italy. Together these destinations
      account for 80% of the skin market.

                                 Table 3:    Skin Exports 1997
                                    Destination         Totals

                                    India                   28,072
                                    New Zealand             22,790
                                    Japan                   10,946
                                    Italy                    6,425
                                    USA                      3,512
                                    Korea                    3,339
                                    Hong Kong                3,085
                                    Indonesia                1,993
                                    China                    1,968
                                    misc                     1,890
                                    Taiwan                   1,154
                                    Germany                  1,000

                                    TOTAL                   86,174


      (Source: Environment Australia Data from the NEWR Newsletter Australian Kangaroo Industry)


4.0   LOCATION OF KANGAROO WORKS
      Export Game Meat Establishments

      There are nine establishments currently registered with AQIS as licensed to export
      game meats (see list below). Only one of these AUSPAN Pacific at Portsmith,
      Queensland, is processing crocodile meat. Southern Game Meat, through their plant
      at Chullora, Sydney is thought to be one of the major processors of kangaroo meat.

                       Trading Company                       Plant Location             State

      Barwon Game Meats Company                                    Walgett              NSW
      Lenah Game Meats of Tasmania                               Rocherlea              TAS
      Overseas Game Meat Export P/L                                Nerang               QLD
      Aussie Game Meats Pty Ltd                                    Roma                 QLD
      AUSPAN Pacific P/L                                          Portsmith             QLD
      Tusker (Australia)                                         Eagle Farm             QLD
      Southern Game Meat P/L                                      Chullora              NSW
      Northern Australian Meat Industries                         Hamilton              QLD
      Wild Game Resources                                        Longreach              QLD

      (Source: AQIS)


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New South Wales

There are approximately 15 processing plants in N.S.W., of these 2 are registered as
human consumption. The remaining processors supply the pet food industry.

The Human Consumption processors are : Barwon Game Meats , Walgett, and
Southern Game Meats ( Part of the Vacik Company) ,Chullora.

Pet Food processors.

               Processor                             Location

 Balranald Trading Co                      Balranald
 Vacik Distributors P/L                    Brewarrina P/L
 Slaters Pet Supplies                      Broken Hill
 Vacik Distributors P/L                    Broken Hill /Sydney
 Clinkat (Australia)P/L                    Dubbo
 B.R. & W.R. Tink                          Dubbo
 Vivan Enterprises                         Hay
 Pet care Co-op                            Nyngan
 Highland Pet Food                         Guyra
 Walgett Pet Foods                         Walgett
 P & A Game Meats P/L                      Cobar
 Stokari P/L                               Gymea
 Tilpa Rangecare & Investments             Wilcannia
      (Source: NSW Meat Industry Authority )

South Australia

SA has approximately 8 processors of which 7 are Human Consumption registered.
(Source: SA Meat Hygiene Unit)

Western Australia

WA has 1 Human Consumption processor and approximately 27 pet food processors.
Of these there are 6-8 major players with Kanga products and Proto Pet foods being
the largest. There are only 3 export premises two in Perth and the other just south of
Perth. (Source : WA Environmental Health Service)

Queensland

There are approximately 3 Human Consumption processors in Qld, and 9-10 Pet
Food. The Main players are Aussie Game Meat , Southern Game and Tusker
Australia. (Source QLD Livestock and Meat Authority)

Victoria

Kangaroos are not commercially harvested in Victoria.

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                 Table 4:      Summary of Processor numbers by State

                       State                    Human Consumption             Pet Food

       N.S.W                                                  2                  13
       SA                                                     7                   1
       WA                                                     1                  27
       QLD                                                    3                 9 -10

       TOTALS                                                13                   51

5.0   PRODUCT PRICES & YIELDS
      Discussions with Wholesalers and Processors indicate that prices are very volatile and
      are under significant internal pressure which is driving prices down. Prices are difficult
      to obtain due to the highly competitive and secretive nature of the industry.

      Retail Human Consumption:             Fresh Product
                            Cut                     Price ($/kg)

                          Strip Loin                        $16.95
                          Rump                              $12.95
                          Diced meat                         $9.95
      (Source: Fyshwick Markets, Canberra – 7 March 1998)

      Wholesale prices are reported to be in the vicinity of $4 to $5 per kilogram for
      Kangaroo Mince with Strip Loins and Fillets in the vicinity of $12 to $15 per kilo.

      Wholesale Pet Meat Prices and Yields:

      Yield:     The product yield from a “typical” 20kg dressed Kangaroo Carcase is
      summarised in the Table below. The size of field harvested Kangaroos varies
      considerably. The table indicates that only 135 of the carcasses are available for higher
      value meat cuts, which has traditionally limited carcase utilisation.

                            Table 5: Kangaroo Product Yields


                       Product                               % Yield           Kilograms

        Boneless Forequarter Meat                             13 %                  2.3
        Boneless Hindquarter Meat                             47 %                  9.4
        Bone                                                  23 %                  4.6
        Skin                                                  16 %                  3.2
        Trim                                                  1%                    0.2

                       TOTAL                                  100%                 20.0


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Pet Meat prices are in the range 80 cents to $1.20 per kilogram, averaging
approximately $1.00 per kilo. Recent volume sales in Victoria have been at 75 cents
per kilo.

Skin prices are volatile and appear to be in the range $10-$21 per skin.




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6.0   RECENT           DEVELOPMENTS                   IN       THE        KANGAROO
INDUSTRY
     Oversupply of Processors: There is an unsubstantiated feeling that the industry is at
     saturation point in terms of processors. This was expressed by a consultant, George
     Wilson of Australian Wildlife Consulting Service. The National Parks and Wildlife
     Service also have restrictions on any more licences being granted in NSW.

     Quota levels: A discussion with Peter Day the Meat Industry Inspector based in
     Dubbo revealed that the Quotas were rarely harvested and reasons for this would be
     that the harvesters in a given area may be of a semi professional nature or relate to the
     remoteness of the area to be harvested. RIRDC state in the “Kangaroo Industry
     Commercial Practices” that only 60% of the available quota is harvested.

     The NPWS have identified that drought and disease are major constraints in the
     setting of quotas. The Blindness in kangaroo seen over the past few years was very
     concerning to all parts of the industry, it appears that the on set of drought lowers the
     animals resistance to the virus. Drought itself reduces numbers and breeding quite
     significantly and these factors are taken into account when the quotas are set.

     Consumer familiarity. Consumers are unfamiliar with the product in all areas such
     as purchase, meat cuts, preparation and cooking. It would be viewed as quite
     adventurous to serve up Kangaroo to the family. The Kangaroo competes against the
     traditional meats such as Beef ,Lamb, Chicken and Pork which are excellent quality,
     consistent in packaging and are familiar to the average home food preparer.
     Kangaroo is just not as prominent or accessible in the market place.

     Significant market development efforts will be required to educate end-users about
     the health benefits from Kangaroo meat and to train them in appropriate preparation
     of fresh products.

     Pet Meat Perceptions: Consumers are not aware of the strict health regulations
     involved in the supplying of HC Kangaroo meat and a perception which needs to be
     worked on is that it is only suitable for pet food. The meat has gained recognition
     from the National Heart Foundation that Kangaroo meat is a health low cholesterol
     meat. The facts are that Kangaroo meat is hygienically clean and healthy

     Animal Welfare Groups: The Kangaroo Industry has received huge opposition
     from the Animal Welfare groups and they would like to see the industry stopped.
     Current indications are that they have had a significant impact on the demand for
     kangaroo meat products in most markets, especially the UK and Europe. They
     currently have an unofficial target of eliminating the Kangaroo Industry within 4
     years.

     The arguments put forward by this group are often based on more emotional grounds
     than scientific. The UK Based Animal Welfare Group (VIVA!) have recently moved
     to Australia and are targeting the Kangaroo Industry. They have been very successful
     in instigating the boycotting of Kangaroo meat sales in the UK.

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Processors were very reluctant to discuss any issues or provide information for fear
that it would be used by the Welfare Lobby in their current campaign.

Industry Responses: The industry has been working to improve the image of
Kangaroo and one positive move was to provide training and strict regulations on
harvesting. “Harvesting” the word has been introduced to help give credibility to the
industry instead of using the term “Kangaroo Shooter” which conjured up all sorts of
“Red Neck” images which consumers related to unhygienic collection of carcases
which were only suitable for pet food.

The industry is typically fragmented, disorganised and populated with small family or
owner managed businesses.

Continuity of Kangaroo Supply Discussions with processors has indicated that
maintaining a regular supply of meat is very difficult and hence the industry is
charaterised by highly variable supply. This will be a key factor in the development of
a Kangaroo Processing business as it is not possible to command premium prices for
quality product unless regular delivery schedules are met. Use of technologies that can
extend shelf life will assist in maintaining supply continuity to domestic and export
markets.




S T R A T E G I C       B U S I N E S S       D E V E L O P M E N T

				
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