MLA suggests that they have delivered an extra $185M in farm gate revenue thanks to the price premiums paid for MSA graded and compliant cattle.
Prior to MSA, producers were paid on the same basis as they are now. However, now we’ve got an extra discount mechanism in place for processors this means that producers do not get the benefit. The fact is that I don’t believe that MSA has brought a premium for top-class cattle, and a lot of cattle are being discounted through it.
How many export cattle that have NOT met MSA standards and were subsequently discounted with the meat harvested from those cattle being exported in the same box with meat that has come off MSA graded beef which brought a so called premium?
MLA tells us that MSA was developed by the red meat industry to improve eating quality. The system is based on 700,000 consumer tests and takes into account all factors that affect eating quality in various cooking combinations.
700,000 consumer tests! Are we comparing apples with apples? The indisputable fact is that MSA has been an evolving process and MSA meat that was tested in 1998 could be a vastly different product than what is being sold as MSA product now, in 2016.
We need to compare the rules laid down in 1998 to the rules that we have now for MSA material. For a start independent graders have been turfed-out, 3,4 and 5 star – gone, DNA testing – gone, boning groups extended, the list goes on and the fact is SOME cattle that would never have got within a bulls roar of MSA in earlier times are now being graded as MSA. Boning groups 1 to 4 has been extended up to 20 allowing lower quality meat to make the grade. This makes for great figures for MLA to say that more cattle are being graded as MSA quality. The fact is that the meat we had in 1998 for MSA is nothing like the MSA meat that we are likely to consume in 2016. The indisputable fact is MSA has been watered down to such an extent that it is nothing like what we started out with, which was a great system.
If one reads back to the business plan for MSA you will clearly see where MSA was developed to stop the slide of consumption of beef on the domestic market. If I have read their business plan correctly MSA has been an abject failure.
Export processors must be rubbing their hands together; the less domestic competition the lower the price for cattle.
Consider the facts, in 2000 Australians consumed 40kg of beef for each man, woman and child. With 19 million people this adds up to 760,000t of beef. In 2016, with a population of 24 million people, we are eating less than 28kg of beef equating to only 672,000t of beef. This is 88,000t less beef domestically consumed. At 220kg per carcass we are looking at a reduction of 400,000 carcasses, consider this against the Indonesian live trade.
Chicken consumption has gone from 24kg to 47kg. In the same period beef has dropped dramatically and even more alarming, pork is about to take over as the second most eaten meat.
Cattle producers in Australia fork out $67M/yr to run MLA which has a total budget of $170 million while the Pork Corporation has a total budget of only $20 million. For both R&D and marketing, pork will soon overtake beef in consumption.
ABARE found Australians ate more chicken than the combined total of lamb and beef. The growth of chicken consumption is mainly due to its’ lower prices and in my opinion, though chicken may be bland, it is always consistent.
The fact is consumption of beef has now fallen to less than 28kg per person and there is no doubt that this is will be a significant challenge for MLA to try and increase consumption of both beef and lamb.
To me it seems that MLA is, as always, in denial and the dropping consumption of beef and lamb is a massive problem for them. The fact is MLA is quick to use any good news to turn into a success story of their marketing.
Perhaps the time has come for the MLA to stop the fluff and bubble and concentrate on the real problems that we have in the beef industry (domestic consumption), such as affordability and the widely varied eating quality.