NSW follows WA in call for beef crisis meeting

29 Jan, 2010 01:00 AM
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A large crowd of WA beef producers attended the Beef Crisis meeting held in Bunbury in November 2007. A NSW processor has called for a similar meeting to be held in NSW.
A large crowd of WA beef producers attended the Beef Crisis meeting held in Bunbury in November 2007. A NSW processor has called for a similar meeting to be held in NSW.

A NSW processor has called a meeting next month to discuss the dismal state of the beef industry, similar to the producer-driven meeting held in WA in November 2007.

Inverell processor and long-time industry agitator, John "JR" McDonald, Bindaree Beef, is making it his mission in 2010 to educate farmers about what they're actually getting paid ? more than 20 per cent less than 20 years ago in real terms ? and why this is unsustainable.

Mr McDonald said good seasons, new markets, growing demand and food security issues won't mean a thing unless the decline in real returns to cattle producers is quickly turned around.

Together with his family, Mr McDonald will kick off a campaign with a big beef industry forum in Armidale next month, calling for transparency in the fees and charges being collected by government and industry bodies and benchmarks to help address this decline, and get Australian producers on a more equal footing with international competitors.

The campaign is being watched with caution at Meat and Livestock Australia (MLA), whose boss, David Palmer, agrees cattle prices are "frightful" but says this is largely a result of currency woes, variable seasons and economic slumps in major markets like Japan - all of which are largely out of the producers' control.

He says productivity has and will remain the key to staying on top of what have been near unchanged prices in real terms since the 1950s.

But Mr McDonald believes the figures on the decline in returns should trigger a major refocus.

Most alarming he says is the fact weighted average saleyard prices for cattle in 2008/2009 were 21.6pc lower than 1988/89 figures and 27.2pc lower than 1983/84 returns, according to data compiled by the Australian Bureau of Resource Economics (ABARE) late last year.

In today's terms, the 2008-09 weighted average saleyard price for cattle was 300.53 cents a kilogram - in 1988/89 the price was 383.47c/kg.

The fall in domestic consumption of beef over the years is just as frightening, he said.

In 1989 each Australian ate 43.2kg of beef each year, and in 1998, when the Meat Standards Australia grading system was launched to reverse falling per capita beef consumption, each Australian ate 38kg of beef.

The MLA forecast for 2009 is that each Australian would eat 31.3kg of beef.

This is despite almost $10 per head in industry and government fees and charges collected at the point of slaughter, much of which go towards research, development and marketing, he said.

American farmers pay the equivalent of $1 per head.

"Our industry is close to crisis point," Mr McDonald said.

"The costs faced by our farmers and industry compared to our overseas competitors is unsustainable.

"We are going to have to change all this, we need a new plan, even some new leadership, to turn this very serious situation around."

The forum in Armidale, NSW, on February 27 will call for complete disclosure of where all the money collected at slaughter is actually going, for what purposes, and whether the expenditure is working.

But Mr Palmer said that "you don't have to go to the meeting at Armidale to know that prices are crook".

"They are terrible, and it's been well and widely documented as to why they are," he said.

"Currency, the variable seasons, the global crisis ? we've got Japan, who is an enormous customer for Australian beef, in the most terrible doldrums.

"We're in a cash-strapped environment and it's having a huge impact on beef and other commodities."

Mr Palmer, who will attend the meeting, said the real price of cattle had not altered much since 1950.

"There was a gyration in the 70s and 80s, but these prices in real terms have narrowly traded in a fifty cent band since 1950," Mr Palmer said.

"The correcting element, which has given sustainability to the industry, has been productivity improvement.

"Australian agriculture since 1953 has trebled in productivity and the Australian beef industry has to achieve 2pc per annum in productivity improvement just to stay still."

WA's beef forum was held in Bunbury in November 2007, and organised largely by Karridale producer Gary Buller.

It saw the formation of the Red Meat Action Group (RMAG), which Mr Buller is now the chair of.

Mr Buller said he had no doubts that the beef forum was beneficial and has led to many positive changes in the state's beef industry.

"Had we not had that meeting, the RMAG would not have been formed and we would not have got WA beef on to the shelves of Coles supermarkets," Mr Buller said.

"As we've travelled along over the last few years, we've talked with people across the industry and in the east and have now got a wide view of the industry and where it sits.

"Without major change to the way we do business and until we have a concept like the red meat precinct, there is no way any of the wealth created in the industry will flow back to the producer."

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