Mr Craig said saleyards added lots of additional expenses to the sale of sheep including yard fees, transport costs, and buyers and agents fees on both sides of a livestock transaction.

“We, as an industry, must continue to challenge the status quo because these additional costs directly impact on consumer prices and erode profitability,” he said. 

“Additionally, saleyards have the potential to increase biosecurity and welfare risks, and to damage product through the unnecessary stress of loading and unloading animals,” he said.

Mr Craig, who is also a delegate to the Sheepmeat Council of Australia, said the pricing of each animal sold through saleyards did not take into account animal variation and, instead, used averages for live weight, fat cover and dressing percentage – another failing of the product-based supply chain. 

“This method provides no incentive for the producer to boost the quality of their product,” he said.

As part of his Nuffield report, Mr Craig has recommended the industry invest further in objective measurements around Lean Meat Yield (LMY) and Eating Quality (EQ), and conduct research to link on-farm production to specific product attributes.

The LMY and EQ technologies could objectively measure intramuscular fat, fat cover and eye muscle depth and yield and underpin Australia’s product quality integrity, Mr Craig said.

He said the industry should also foster a virtual mechanism with a pricing model based on Hot Standard Carcase Weight (HSCW), LMY and EQ for processors to secure supply of animals direct from farm, while improving communication and reducing unnecessary costs. 

“Currently, sheep price reporting is based on a simple supply and demand method, but this could change to focus on a system which reflects quality attributes,” Mr Craig said.