MLA believes and claims:
“. . . MLA’s market access programs had the potential to return $8 for every dollar invested by industry.”
and “Collective investments in marketing have been projected to deliver a return as much as $5.80 for every dollar invested in international markets such as Japan and Korea.
“Over the next three years MLA will continue to focus on marketing activities that include: High impact campaigns in Australia and our major overseas markets that maintain and grow demand for out products.”
Managing Director MLA, Scot Hansen, Corporate Plan 2012-15, August 2012
The reality is:
Domestic 1 – Since 2000 –
- Domestic consumption of beef has declined 8.4%, from 38kg to 32.2kg per person per year
- The retail price of beef has increased 50% from $10/kg to $16/kg 1
- Consumers are spending an additional $2.5b on beef per year
Export Prices and Volumes of Beef 1 – Since 2000 –
- The volume (tonnes) of exports has remained the same for the past decade
- The value ($) of exports has remained unchanged
- The unit price of exports (A$/t) has remained unchanged.
- The combined value and volume of beef exports to premium markets in Japan and South Korea are currently at about the same levels as they were in 2004 after peaking in 2006 following the ban on US imports due to BSE
Farm Gate Cattle and Retail Prices 1
- The nominal farm gate price of cattle has remained unchanged since 2000
- Cattle producers have not captured a single dollar of the additional $3b (an estimated $700 per head slaughtered) spent by Australian consumers
- Virtually all of this additional expenditure was absorbed by the retail sector
- The real farm gate price of cattle has declined about 30% since 20001, given the increase in farm operating costs.
MLA has spent about $1b on marketing since its inception. Based on MLA’s claimed “returns” of between $5 and $8 from every dollar spent, the industry income should have increases in the order of $6-7 billion per annum. This claim is little more than a fantasy.