AFTER a dramatic saleyard boycott last week, farmers are calling for a Senate inquiry into red meat processing sector, citing negative impacts from shrinking market competition.
Farmers said reduction in competition for their product had reduced cattle producers’ ability to “get a fair price”.
NSW Farmers Cattle Committee chair Derek Schoen said producers relied on a diverse market and pointed to the Australian Competition and Consumer Commission’s (ACCC) approval of JBS’ acquisition of processor Primo as a particular point of concern.
“The acquisition of Primo by JBS will diminish competition and it will be incredibly difficult for any new entrants to enter the market.
“The best way to move forward is for the government to hold a Senate inquiry into the whole issue of consolidation in the red meat processing sector to enable the issue of competition in the market to be explored properly,” Mr Schoen said.
In a joint statement, NSW Farmers and Victorian Farmers Federation (VFF) said they were prompted by recent developments to take action.
Last week up to 10 buyers failed to appear or buy cattle at the first prime cattle sale at the new Barnawartha saleyards, near Wodonga, Victoria, with pre-weigh and post-weigh selling methods at issue.
“Both organisations and their members are extremely concerned following actions taken by processors to boycott the Barnawartha saleyards last week, which highlighted the increasing market power of red meat processors,” the statement said.
VFF livestock president Ian Feldtmann said farmers he represented had expressed “enormous concern” about industry consolidation.
“The reality is the boycott is just a symptom of processors gaining too much market muscle and the issue of processors’ market power needs to be taken further,” Mr Feldtmann said.
NSW Farmers said the retail price for beef had risen from $10 a kilogram in 2000 to $16 a kilogram in 2012, while saleyard prices had remained at around $3 a kilo over the same period.
A meeting will be held at Barnawartha Hall on Monday March 2 to discuss the issue.
ACCC chairman Rod Sims drew immediate fire from Nationals MPs upon approving the Primo acquisition, including from Senator John Williams who said he was confused to find the commission approving the sale, "yet in the next breath says it is wary of the potential impact of the further consolidation of abattoirs".
"If that is true, why didn't it act in this instance?" he asked.
"This decision has been met with dismay by farmers and the livestock industry."