IT IS no secret the processing sector is going through a tough time.

And during tough times, take-overs and rationalisation of markets are frequent bed-fellows.

While they may not be out for world domination, global meat processing giant JBS Swift has certainly made its mark on the Australian meat processing sector in the past decade.

After acquiring Australian Meat Holdings in 2002, Swift Australia really burst on to the Australian scene in March last year when it purchased the Tasman Group for $US150 million.

In the past 12 months, the national processing landscape has changed even more.

The fluctuating Australian dollar, combined with weak and patchy global demand for local beef but very strong demand for lamb and mutton, has had a big impact on prices at each end of the spectrum.

The market is ripe. Clever buyers consolidate when currency advantages are strong, conditions are tough and capacity is in abundance - which is the case for the Australian export market currently.

But what does this consolidation mean for Australian producers as kill days are dropped and major processors in southern Australia are bought out or shut up shop?

The news that Swift Australia - owned by Brazil-based parent JBS Swift - bought Tatiara Meat Company for $30.1 million just before Christmas seems to have prompted a rash of acquisition by the beef giant.

The most recent is the purchase of feedlot processing facility Rockdale Beef at Yanco in NSW - confirmed late last week - for a rumoured $28 million, while there are whispers in the industry that they are also in talks to buy Castricum Brothers' export facility at Dandenong.

The Japanese-owned Rockdale can kill 200,000 cattle a year and exports to 12 countries.

According to unconfirmed reports, Castricum is in the final throes of negotiating a sale following the announcement last month it would stop work for three months.

However, this is something Castricum Bros' managing director Gary Castricum was fairly coy about.

"No, no comment to make about that," he told The Weekly Times.

"We can't control what people say (in relation to the rumours about the sale)."

But, he was prepared to say that Castricum Bros was still operating at 20 per cent of capacity, custom killing some animals.

Market consolidation can sometimes mean the suppliers - in this case Australia's beef and lamb producers - miss out.

However, while less companies can mean less competition, the capacity is still there regardless of who owns it, and needs to be filled, so while Swift have reduced the pool of buyers, it may not be all bad news for producers.

According to the most recent Meat and Livestock Australia analysis of the red-meat processing sector, in September 2007, Swift Australia was then-the biggest player with 15 per cent of the market, with Teys Brothers, Nippon Meat Packers, Tasman Group and Cargill rounding out the top five.

Since then, Swift have bought the Tasman Group - the fourth-largest player in the processing sector at that time - as well as Rockdale Beef, then ranked number 10.