CONCRETE examples of how just-in-time slaughter data is being utilised by producers to add value through the beef supply chain is what processors want to see.
Given the downward pressure on end product prices coming from overseas customers as a result of the open access to this type of market intelligence, there has to be a very good case for it, peak processing body Australian Meat Industry Council (AMIC) is arguing.
The stalemate continues over Meat and Livestock Australia’s weekly slaughter report, which has now been published with large sections of “no quotes” for more than a month since processor JBS Northern stopped providing its figures.
Fairfax Media understands MLA has been in discussions with the Federal Government on the possibility of using its Export Production and Condemnation Statistics (EPACS) data, currently only available more than a month after the fact, in more timely fashion.
MLA has reportedly informed the government its attempts at brokering a solution are being stonewalled by processors.
A five-point plan to end the stalemate, put forward by processor Teys Australia and circulated to the big players in the processing sector by MLA, has been knocked back by AMIC.
The solution involved verifying the voluntary data collected against National Livestock Identification System (NLIS) plant data and EPACS, even if that was not just-in-time verification.
It also proposed publishing variances between processors where they were greater than five per cent and publishing plants that did not participate.
MLA argues, quite simply, that informed markets are efficient markets.
Against a backdrop of Australian Competition and Consumer Commission and senate inquiries which strongly concluded there was a need for more transparency and greater use of market information in the beef supply chain, MLA says it will continue to work assiduously to negotiate a solution.
AMIC, however, says “blind provision of information just because it sounds good” is fraught with danger for the entire industry and is indeed where other concepts, such as objective carcase management, fell over.
AMIC wants to cease the weekly service and rely only on the later-published government data.
The peak body argues producers will still get the information, it’s accurate and it won’t impact negatively on negotiations with overseas clients.
“This would provide a greater competitive advantage to processors, rather than to overseas buyers who can react to the weekly slaughter data in price adjustments,” AMIC’s chief executive officer Patrick Hutchinson said.
“If the slaughter data is designed to be used for forward planning in production, the long production cycle of livestock allows for the five-week delay in its provision.”
AMIC put forward comprehensive grassroots evidence from members who described significant implications to the trade environment as a result of headlines around the reporting of market information in Australia.
In one case, Japanese buyers immediately dropped their forward prices to a degree that equated to $33 a head in response to reports of record grainfed beef exports.
Combined with demand factors at play in other markets, it effectively meant any plant not listed for China wanting to sell volume was hamstrung that week, AMIC said.
AMIC was also highly critical of what it interpreted as a ‘name and shame’ exercise in the publishing of processor variances and those that do not participate.
There may be any number of reasons for a larger-than-normal variance in slaughter figures and this proposition would breach commercial confidence, it said.
“Although this practice (a weekly slaughter report) has been ongoing for many years and there were some benefits to aggregated industry data, AMIC notes the potential for significant negative price impacts for processors and, by extension, the producers and feedlots that supply them when high, and record, figures are published in a short time after the event,” Mr Hutchinson said.
One AMIC member said Australia’s major importers of meat used the available data when possible to soften prices.
“The importers often refer to the slaughter figures for the week, especially when there is already a large volume on the water and in overseas cold stores,” the processor said.