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Beef Summit…

Beef summit held recently in central Queensland made some interesting reading.  According to the ABC report beef producers said they want to focus on convincing consumers to pay more for their meat and getting better value for their levies. To me getting better value for levy payers is simply a no-brainer, what we have now with the present setup is producers are doing the paying and very little of the saying. I have no doubt that this suits part of the industry like supermarkets, retailers and processors who pay nothing or very little towards MLA marketing and upkeep while getting huge benefits from MLA marketing dollars.

Many are looking for a better relationship with beef processors and more transparency from levy funded bodies. MLA managing director, Richard Norton, said the industry was buoyed largely due to high prices. Make no mistake, the only reason that prices are high and producers are a getting better share of the dollar is lack of supply. Processors make a big deal of their desire to keep producers afloat. However, when they were getting record prices in overseas markets and there was a glut of cattle due to interruption in live shipping and drought, they showed as much compassion to producers as a crow sitting on the fence waiting to pick the eyes out of a dying beast.

To my way of thinking the two most important things in the domestic beef trade are price and a consistent product.  Price: when I can buy MSA porterhouse at $12 a kilogram wholesale and then walk into the supermarket and see the same porterhouse selling for $30/kg plus I consider this a considerable mark-up. Should we be looking at the large supermarkets and ask the question “are they price gauging?”  To me I have no doubt that they are and this is where a simple US system could be adapted to suit Australian conditions. Chicken is a fraction of the price of beef and is always consistent in quality. US producers get a lot more for their animals whilst their consumers pay considerably less for their beef.  In Japan Australian beef is selling at the same price as Australian consumers are paying.

MSA is the flagship of quality.  (This is nothing but a load of hot air).  The ABA has continuously asked the MLA to do a trial on MSA product where a mystery shopper is sent round to purchase samples from different retailers all with an MSA brand. MLA, for their part, is very reluctant as they are afraid the mystery shopper will buy lower boning groups which may come off an inferior animal. To me this is stupid to say this as MLA admits privately that MSA products are inconsistent and the foundations of MSA have been undermined by simple greed.

Cattle Council president Smith said research into transparency, which many producers were calling for, was one project the industry had invested in. If the industry has invested in price transparency I think they’ve done a pretty lousy job. CCA say it was not as simple as taking the American system and implementing it in Australia. One size doesn’t fit all as we export 70% of our product.   

The US system may not be perfect but it is a good start on getting a price transparency system set up in Australia.

The best line that was quoted, “what we don’t want to lose is our competitive edge, either by giving away trade secrets on how we are producing a product and at what cost”. The fact is that we have our biggest processor being a Brazilian company, and reportedly our biggest voter in MLA being part of the landscape. Also in about 2010 Ian Mars CEO Swift Aust. joined the MLA board and would have more information on the cattle industry in Australia than 99.9% of producers in Australia. To say Mars did not understand any competitive edge or any trade secrets is simply a fantasy.

Surely the industry should be looking at ways that we can all work together to develop systems like MSA which I have often quoted that I believe was one of the best grading systems before having the foundations ripped from under it.

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