The ABA will be hosting a beef forum on Monday the 23rd in Casino at the start of beef week.
The forum will initially concentrate on some of the problems facing the industry and then concentrate on finding solutions to the problems.
Some fast facts:
- The beef industry is worth $19.2 billion to the Australian economy and Australia’s biggest rural export earner and employs some 200,000 people.
- At the present time processors and retailers have the biggest control over producers prices the supermarket duopoly has a huge concentration of power, in 1998 we had 5 processors controlling 28% of the export market and now we have three controlling 60% of the export market.
- Our domestic market for beef continues to fall at an alarming rate, probably due largely to 2 factors: inconsistency of product and price. Chicken is killing us on product consistency and price and pork is about to overtake beef in being the second highest meat eaten.
- Over the years we have seen our statutory grass fed cattle levies being used by MLA on R&D and marketing. In the case of marketing many hundreds of millions of dollars has been spent over the last 10 years for what result, the loss of market share.
- MSA: some consider this the greatest failure of all time. Though brought to arrest the slide of consumption it has failed and has resulted in the loss of market share which it was created to do, despite the hundreds of millions of dollars spent.
- The beef market has taken off and people like Barnaby Joyce stands on his record of record beef prices and Richard Norton from MLA simply can’t help himself. What these people don’t seem to understand is that what comes up so quickly can come down with equal speed.
- A great example is the Eastern standard indicator published by the MLA in 2000. Producers were getting $3.05/kg on average by 2013 producers were getting $2.88/kg and by 2014 this had gone to $2.99/kg and by 2016 we were getting $6/kg, which caused so much excitement and now we have seen probably a dollar shaved off that price.
- Whilst we have few processors and supermarkets with immense power in contrast we have a very diverse, poorly funded producer organisation.
- The simple fact is when producers are doing well processors tell us that their margins are severely tested and high prices like six dollars will see them lose large amounts of money.
- These are some of the negatives however our forum will try and concentrate on what we can do to create a positive outcome for all industry, people should remember this is an absolute necessity.
- Change is not an option and the producer is simply an irreplaceable cog that keeps the whole industry going on without them there will simply be no industry. Processors and retailers make much of the fact that they look after producers and they realise that they are crucial.
- In 2012- 1213 we saw one processor make a profit of $21 million the next year we read where they made $195 million and paid their workers large bonuses. This increased profit came at the expense of producers who were paid prices at less the cost of production. Hundreds of producers were thrown off their properties.
- One of the crucial things up for discussion is how to get a functional well-resourced body to look after producers’ interests. We have already seen seven recommendations made by independent Senate called by the Minister who told everybody that they would have to abide by the umpire’s decision. Ironically the only one that didn’t take any notice was the Minister himself.
- One of the keys to getting an independent democratic board up to look after producers’ interests is to identify all levy payers who pay a five dollar levy. Then we can have independent elections one man one vote surely not too much to expect in a democracy.