Beef middle men on notice: Twiggy

09 Oct, 2014 11:00 PM
We need to be growing our base, growing our herds, and supplying our markets

MINER-CUM-BEEF producer Andrew Forrest wants to use the relationships he’s built in China to streamline the Australia-China beef trade and put the local beef industry on a more robust footing.

“There are way too many middle men,” said Mr Forrest in a recorded interview played at BeefEx, the lotfeeding conference held on the Gold Coast this week.

“We counted 19 between paddock and plate in our exports into China.”

Mr Forrest believes the knowledge and trust he developed in his iron ore trade with China can be redeployed to build trust into the relationship between Australian agriculture and Chinese consumers, and to simplify the supply chain.

It’s about “getting China to communicate directly with Australia about what they need in the long term, the type and quality of food”, he said, so that, “our farmers with that information can grow to that specification, and grow volume, and secure a much brighter future for the sector”.

Mr Forrest, 53, is estimated to have a net worth of about $5.86 billion; a fortune made on the back of mining.

As the China-driven mining boom loses its lustre, Mr Forrest is moving into what many regard as the next big opportunity thrown up by China’s industrial revolution: food.

In 2009, Mr Forrest diversified into the beef industry by buying back Minderoo, the Pilbara station that was in the Forrest family until 1998, when his father was forced to sell it due to drought and debt.

Mr Forrest has since bought two adjoining properties, taking his Pilbara holding to 7300 square kilometres, and this year bought Western Australian meat processor Harvey Beef for $40 million.

Having Mr Forrest promoting the interests of Australian beef in China could be one of the most potent weapons available to the local industry. His history of trading iron ore to China has given Mr Forrest deep connections, and a profound understanding of the Chinese business environment.

“When I met with the Premier of China, he had put me on notice that the issue that was pressing upon him most was the subject of food safety and food security for his people,” Mr Forrest told BeefEx.

“That was easy for me to embrace. I was up there chairing a senior business leaders' forum for top business people in China and Australia, and food security was right on our agenda.

“I committed with the Premier that we would start a meeting where we would generate certain communications between Australian suppliers and Chinese consumers. This would get rid all that difficulty, confusion and loss of market share that you have because there are so many intermediaries between producers and consumers.”

The loss of profit caused by a tangled web of intermedaries hurts less than the loss of information, in Mr Forrest’s view. The message from the consumer gets distorted by the middleman network to the point that the producer fails to understand what’s required in the paddock.

Improving those communication channels is one of the goals Mr Forrest has for Harvey Beef.

“If we can have great communication between our purchasers, farmers and suppliers, and really let them know what our markets need the most and have farmers breed to type, then I think we’ll have a much more prosperous industry.

“I don’t think we should just maintain our place in the market. I think we’ve just begun the fight. We need to be growing our base, growing our herds, and supplying our markets with much greater certainty of reliability - and much fewer middle men.”

Animal welfare issues

Asked by Australian Lot Feeders Association chief executive Dougal Gordon about animal welfare pressures on the feedlot sector, Mr Forrest said the issue is “perfectly addressable”.

“There is a wave of opposition out there. It’s not collectivised yet, but I’ve seen it all around the world.

“Basically it’s about the happiness of the animal. Let’s cut away the criticism before it really collectivises.

“In the feedlot industry, we should make sure our cattle have room to move, room to roam; that they are living comfortable stress-free lives. If we can always demonstrate that, then the Australian grainfed industry has nothing to worry about.”

Mr Forrest’s commitment to animal welfare is yet to be put to the test, but he has made a firm commitment to human welfare, establishing several organisations aimed at fighting slavery.

The Walk Free Foundation, founded by Mr Forrest and wife Nicola, estimates that there are currently about 29 million people enslaved around the world.

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beef middle men on notice
10/10/2014 1:52:55 AM

twiggy giving mining the flick, moving into beef !!!!!
10/10/2014 6:19:47 AM

I reckon Twiggy is going to give the ag industry a real shake up over the next few years....just what the industry needs I think.
10/10/2014 7:41:06 AM

he is one of the best community minded business man
10/10/2014 8:10:36 AM

Either that, or Ag will give Twiggy a real shake up :)
Bruce Watson
10/10/2014 9:14:50 AM

Mr Forrest and his ideas, financial strength, and his proven entrepreneurial skills, is exactly the sort of person we all need to support. When we consider what Mal Peters said in this week's The Land (p. 28), Twiggy Forrest will be a breath of fresh air. I look forward to a better organised and more productive and rewarding meat industry in Australia.
Western QLD
10/10/2014 9:24:38 AM

Primary production pricing Bill and cut out 90% of the middle Men . Guarantee Farm gate price increase.
10/10/2014 9:30:54 AM

i wonder if he includes farmers in the list of the enslaved? Mr Forrest should look at the new wheat industry, what we had was about as good as you could get it, what we've managed to do in the last few years is transfer the industry to the hands of the middlemen.
10/10/2014 10:11:28 AM

Yes mark2 the wheat industry has been relegated back to where it was before AWB thanks to John Howard. In 1921 the US President put in place the Packers & Stockyards Act to protect small producers from predators, collusion and middlemen. Hopefully Twiggy will help bring about something similar. I hope Rob Moore reads this & is heartened by such news. Perhaps he can make contact with Twiggy to help in the push for new direction
beef middle men on notice
10/10/2014 10:21:02 AM

Twiggy no fool. '!!!!!!!!!!
10/10/2014 11:13:06 AM

There is little stopping a farmer or group of farmers to follow his example. Analyze your supply chains, identify opportunities and threats and do something about it. Perhaps with his "status" it is easier for him, but it is possible to follow his example.
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