MLA has spent hundreds of millions of dollars on local and overseas marketing for red meat. The big question has it helped producers? Producers pay 54ml in stat. levies whilst processors pay $9ml refuse to contribute to overseas marketing producers have no such luxury. Supermarkets don’t contribute towards the MLA, yet any benefits of marketing are captured by them through there excessively high retail mark-ups.
In 1998/99 MLA rolled out a grading system called MSA, part of its business plan suggested that this would ensure that beef would retain its place as top of consumption Beef – 38kgs, chicken – 29kgs in 1998. Roles have reversed in 2013, chicken 43kgs beef 32kgs and beef consumption dropping. Beef consumption has dropped by 6kgs while chicken has increased by 14kgs. Additionally, lamb has decreased from 17.5kgs to 9.9kgs while pork has increased from 19.4kgs to 26.3kgs. It is worth remembering that MLA performs all marketing for Beef and Lamb.
In 2006 the MLA asked for an increase in beef levies mainly for marketing so again beef consumption would stop sliding. This resulted in the levy is going from $3.50 to $5.
2009 the MLA conducted an (independent) enquiry into the efficiency of the $1.50 of course this report came back saying the increase was worth many times the investment of $1.50.
In 2007 MLA conducted a so-called independent review into MSA and found investment in MSA $210 million was worth in excess of $900 million to the beef industry.
One could be excused for wondering who MSA has been good for processors can buy cows at cow beef prices then bone it and sell as an MSA product which would bring a premium.
In 2007 the then Minister for agriculture called a review by the ACCC seeing retail prices were at record highs and record lows for the producer. In 2013 nothing has changed if it has it has worse for producers.
Coles’ submission to ACCC 53% of final retail price goes producer 14% to the processor and 30% for refrigeration cutting slicing packaging and a small profit leaving 3%.
After much pressure from the ABA the MLA bought out a chart that showed what producer share of the retail dollar was, in that chart they quoted a carcass would yield 57% saleable meat.
The ABA question these figures and one well-known journalist got very angry and suggested that he had been contacted by a processor and the 70% was only a wholesale yield and 57% was the retail yield.
ABA then decided we would get an independent cut up done at a registered boning room to be overseen by the University Tasmania.
The cut up was filmed and can be seen on the ABA website this of course proved without doubt that 70% average is about right.
This year the MLA came out with their share of retail dollar and used 57% 68.7% and 72% and 70% the producer was getting less than 30% of the retail dollar.
One wonders where MLA/cattle Council were when the ACCC and other government instrumentality enquired into the beef industry.
Could it possible that man cannot serve two masters and the MLA is try to serve processors as well as producers and cattle Council is beholden to the MLA for funding.
In 2011 MLA came out with a chart showing that chicken consumption has rocketed ahead the reason being the chicken production costs are much less than beef production. Could I suggest that the cost of production hasn’t got much to with beef retail prices which have gone up by 60% whilst producers’ prices remain the same over the last decade?
Some people will say that you can’t hold MLA and cattle Council responsible for the beef producers’ plight. One may suggest that producers have got very little value for money whilst Supermarket and processors have thrived on producers levies.
In 2001 export trim 90 cl was worth $4.80 carcass value $3.43 and dollar was $1.05
In 2013 the price of 90 cl trim was $4.65 for carcass value was $2.80 whilst the dollar is 90 odd cents. The Senate inquire could be very interesting.
From ABA directors and staff, we would like to wish you a very merry Christmas and a prosperous New Year; hopefully the tide is turning on cattle prices.