Earlier this month, I received an invitation from the Richmond River beef group to attend a meeting.
In Casino by the Richmond River, it was fascinating to look at peoples places that belong to faces I have met with- this was an education all of itself. The people I visited were actually wonderful and had several offers to stay the duration of my visit. Anybody reading this will be aware of the people I’m talking about, and I would like to give a vote of thanks to their kindness.
As always each different part of our country has its own unique set of problems but there are some problems that connect all. Overwhelmingly, the one problem that seems to straddle producers is what they are not getting is an adequate return for their product. A lot of the people I spoke to had a source of income coming from somewhere else.
One of the places I was very keen to visit was Bindaree Beef owned and operated by the McDonald family. Over the years I’ve come to know JR along with his family and always found them very accommodating, welcoming and generous. To tour the plant was a real eye-opener as was viewing their system where as they dealt with all sorts of orders around the world, but to me the highlight was the fact that a lot of meat came in the back door as livestock and went out the other end as case ready meat.
MSA was used very carefully, as it should be, and with this in mind their different brands were under pinned to ensure some of the best meat in the land could be identified as such under a Bindaree label.
About 80 people attended the meeting in Casino to hear both myself and Jed Matz actually speak on what our groups are actually trying to achieve in a restructure. From the ABA’s point of view we are looking at getting all seven Senate recommendations up and running.
Some of the slides during my presentation I think are worth sharing.
1. Showed how complicated the whole structure was with five peak councils contributing in various amounts to the MLA but cattle producers pay over 50% of the levies paid into the MLA.
At the other end of the contribution scale, processors have a statutory levy taken out $22 million, however unlike producers their levy goes into their own service organisation that then pay MLA with conditions attached of a little over $10 million, they have $38 million in retained earnings, and interest earned is $1.6 million.
Cattle Council which represents grass fed producers operates on a negative budget of $1.6 million and as the cattle producer peak Council is broke and in some circumstances ineffectual. It seems to me that the people that are doing most the paying (Cattle Producers) are doing little of the saying.
2. This slide came up and showed the price of cattle flat lining over the last 15 years, whilst at the same time the cost of production going up by 45% over that time. Simply the cost to raise stock has gone up by 45% over that time; last slide showed debt levels for beef producers soaring out of control.
3. Who is profiting whilst producer prices have remained on the flat line? In recent times the price of retail meat has gone up quite drastically as well as exports yet farm gate prices have not increased until recently; in many cases prices have decreased.
4. MLA marketing, who does it actually benefit? We have seen MLA throw millions into marketing that has raised the price of retail meat, however very little IF ANY comes back to the producer. In 2000 Australians ate 38.5 kilograms of beef whilst at the same time we ate 29 kg of chicken since that time we see a reversal with beef consumption dropping to 32 kg and chicken has gone up to 45 kg per person.
4. World cattle prices in Australia have a scenario of no BSE, no FMD but have NLIS and LPA. Despite our enviable disease-free status, trace back and quality assurance systems , Australian cattle producers get less than countries like Paraguay that have had huge problems with FMD along with the US and Canada both had problems with BSE.
5. MSA was developed to stop the decline of beef consumption. By 2007 MLA had spent $210 million dollars on MSA. The fact MSA was a great system when it was designed, however the problem was processors and supermarkets would not adopt it. The simple fact is it was too successful when used correctly, cutting down the lucky dip of inconsistency that makes so much for retailers and processors alike. The problem is, it leaves consumers dissatisfied with quality and price as a result we see a decrease in consumption of beef
6. AusMeat the language and police force for the industry. One could argue with some conviction that processors and others are using the system in an unfair manner. The language committee which the AusMeat board place so much faith in consists of 4 processors, 1 one supermarkets, 1 Lot feeder, 1 pork, 1 lamb producer and of course one lonely beef producer. The processors and supermarkets must be laughing all the way to the bank as they seem to have the ability to manipulate language and its definitions
What can we do as producers? We must ensure that every effort is made to get the seven Senate recommendations up and of course this will ensure that producers can have their own cheque-book and therefore control their own levies. The fact is producers should be demanding a transparent scientifically based and sound language and methodologies that doesn’t create the ability to discount producer products that don’t deliver consistent eating experience to consumers.