A comprehensive new strategy document released by Cattle Council of Australia details where the CCA believes the producer can get the best bang for their buck over the next five years.
Again, all fluff and air, little substance, little real world economics, and with the profits of such plans shortcutting the producers again.
Two phrases appear regularly in the document, which captures the central focus of the industry plan: ‘fit for purpose’ beef production and ‘value-based marketing’.
Cattle Council president Howard Smith says value chain thinking is the key to the industry’s future.
All great stuff? Let’s have a look at the record of the past decade.
- Australia must hold the record for the most regulated beef industry in the world due to high regulation.
- MSA, LPA, NLIS, the list goes on and on and I don’t think anybody could dispute that our industry spends more than any other country on regulations.
- Grass fed cattle levies for 2014-15 put an enormous $67million into MLA’s books, with little to no transparency for, or management by, the producers who pay the money.
- Producers even have the dubious honour of paying huge sums on “Marketing’ of beef while receiving none of the increased profits of the last 4 years. Now CCA wants to spend more on export markets.
It seems ironic that processors refuse to pay towards MLA marketing, but are happy to watch producers carry the can. All the rhetoric about the ‘pull through’ effect to producers has never eventuated.
Producers should be entitled to ask what all the marketing, certified programs and increased regulations has brought them.
Until recently Australia has been getting some of the lowest cattle prices in the developed world while producers in Uruguay and Paraguay, though having all suffered problems with FMD, still manage to get better prices than Australians who have all the bells and whistles. We spend huge amounts of money on marketing and insurance systems, the vast majority of which is funded by producers.
The simple fact is producers do the paying whilst processors reap the rewards of imposed producer marketing schemes.
The head of Australian Country Choice recently spoke about processors naming their own price in the not too distant past. He also admitted that the US export market was like a steam train out of control in recent years.
We are now told that marketing beef is very difficult and is in contrast to 2 years ago when processors could name their own price in overseas markets whilst screwing drought ridden producers. Now export markets are very price sensitive and orders are being cancelled whilst producers are receiving a reasonable return.
So what is the use of producers paying out huge amounts of money for marketing which gives them no benefit and no guarantees?
Domestic marketing is not considered important; however it is one of our biggest beef markets, especially now that the export markets have gone off the boil. I do really wonder when producers, who fall over themselves to join these marketing schemes, will realise these facts.
For numerous reasons our domestic market is our most valuable and important market, however the consumption of beef is sliding at an alarming rate. There seems to be little offered in the CCA’s plan to avert the downward slide, despite it being where 30% of our beef goes.
With all these planned programs for producers to make it easier and slicker for processors to sell beef internationally, could it be possible that CCA will get a commission out of the new developments?
So again, it will cost producers vast amounts of their own money in order to keep CCA on oxygen again, and still dysfunctional.