Shutdown highlights market concerns

02 Mar, 2015 09:30 AM
Comments
3
 
We can’t be at the behest of two meat processors ...

THE closure of two meat processing plants following cyclone damage in Rockhampton, Queensland, paints a grim outlook for local cattle producers.

Cattle Council of Australia (CCA) president Howard Smith said he was concerned about the situation, which will see JBS Swift’s plant closed for at least a month and Teys Australia's plant for at least another week.

“This will obviously put the supply and demand equation back to where it was, so there will be more supply than the capacity of the plants,” he said.

In the past month, the future was finally looking up for embattled beef producers, who were reaping higher prices with a lower dollar and a shrinking of the national herd.

Supply bottleneck

Mr Smith said there was talk of other plants doing extra shifts to cope with the local supply, but the closure would still take a toll on producers with added freight costs.

“Industry has discussed this, and if there is anything we can do to move the processors along as quickly as possible, we will,” he said.

Mr Smith said the earliest he could book livestock into the meatworks at Biloela was in April, and the lead up to seasonal turn-off was an added complication.

“We then have a run of short weeks with Easter - and it has always been a difficult time (to book processing) with cattle without this happening.”

The closure of both plants has highlighted market concerns for central Queensland producers and renewed debate on introducing live export to the region.

“We need diversity in any business and live export is part of that," Mr Smith said.

Questions over Port Alma

Queensland Minister for Agriculture and Fisheries Bill Byrne met with the two Rockhampton-based meat processors on Wednesday to discuss the damage. He said that although he supported live export, he would not support it out of the central Queensland (CQ) region.

The new minister has been a vocal opponent of a plan to launch a live export trade out of Port Alma, near Rockhampton. The proposal aims to relieve an oversupply of cattle relative to local processor capacity - a problem exacerbated by the CQ plants' shutdown.

Port Alma is not economically viable, Mr Byrne said, and introducing live ex would also jeopardise 2400 permanent jobs in his electorate.

“When I say something, I don’t change my opinion down the track unless there is compelling evidence to do so.”

Mr Byrne said whether Port Alma went ahead or not would be a commercial decision at the end of the day.

Former member for Keppel Bruce Young, who has championed the potential export hub, said the temporary closures demonstrated the need for more markets.

“In central Queensland, we have the biggest cattle numbers in a 150-kilometre radius, and we can’t be at the behest of two meat processors,” he said.

Mr Young said plans for Port Alma were full steam ahead, and he was to be updated last Friday on the plan's progression. However, Cyclone Marcia hit his property, north of Yeppoon, and he had instead spent the past week chainsawing and clearing fences.

Mr Young said the Agriculture Minister could make one phone call to the State government-owned Gladstone Port Corporation (GPC) and make it happen.

“The GPC were as keen as mustard.”

Calls for inquiry

Producers in NSW and Victoria are calling for a Senate inquiry into red meat processing sector, citing negative impacts from shrinking market competition.

In a joint statement last week, NSW Farmers and Victorian Farmers Federation (VFF) said they were prompted by recent developments to take action, as 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.

“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.

NSW and Victorian farmers are gathering today at Barnawatha near the Victorian border to rally against the growing market power of meat processors.

- with FarmOnline

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QCL

Inga Stünzner

is livestock editor for Queensland Country Life
Date: Newest first | Oldest first

READER COMMENTS

Sir Les P
2/03/2015 12:02:34 PM

Bill Byrne from the Labour Party talking about Port Alma not being economically viable/ I've never seen anybody from Labour able to handle business & finance. If a business wants to start live export out of Port Alma Byrne should be looking at merits of it not how many votes he'll lose from meatworkers,his duty is to the state of QLD not to trying to protect his job.
Bushfire Blonde
3/03/2015 9:40:14 AM

Isn't it just as well for North and Central Qld cattle producers and the associated Regional economies that there is a healthy Live Export market.
Northern Exporter
4/03/2015 6:53:33 PM

forget the meat-works and their operators contact your Live exporter agent and start meeting those specs - push for the live export facilities at Port Alma and establish more live export loadings of ports further south. Vietnam is now taking Jap Ox spec bullocks out of Townsville there is no reason you cannot sell 90% + of your turn off to live ex now. CCA and Howard Smith are part of your problem they are part of the processor controlled "industry" based in Canberra; vote with you feet go Live Ex now!!

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COMMENTS

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And this would ring a free market economy in a democracy. To bad so sad.
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Why don't farmers demand cash on delivery from any trader they have no record of performance
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I am in no position to comment on the issues between Culleton and the ANZ or the other farmers