Long list of concerns aired at producer meetings

The meetings, at Longreach, Cloncurry, Roma and Quilpie, were organised by Queensland LNP Senator Barry O’Sullivan, in a bid to nut out any possible ways the boom and bust nature of the cattle market might be addressed.

It involved industry leaders across the cattle production, meat processing and research and development arms of the beef supply chain.

There were firmly-held beliefs that manipulation of cattle prices is occurring and producers are not getting a fair go.

Much of the angst was directed at processors.  

Distrust is possibly at its highest in western Queensland, where four years of drought forced many to sell on a vastly oversupplied market at historically low prices.

The high prices of the past year have hampered attempts to restock and these producers are certainly not sharing the spoils of today’s record cattle market.

Much of the region is only at 20 per cent stocking capacity, according to producers who attended the Longreach forum.

The way producers were treated by processors during this disastrous period has clearly left a sour taste.

Hughenden’s Rob Atkinson, “Katandra”, said processors did not work with their supplier partners in any way to support them.

“All they did was offer meagre prices to already struggling producers,” he said.

Mr Atkinson said the issue that most had producers up in arms was when a carcase graded Meat Standard Australia then fell out on the back of company specifications.

That potentially brought the price paid to the producer back by 20 per cent.

“For a $1600 bullock today, that’s $300,” he said.

“All the major processors have company graders - they are not independent.

“That’s just not fair on the producer.”

The differences in standard trim in Australia compared to the United States was also raised.

Mr Atkinson explained: “When a carcase is weighed in the US, the kidneys, channel fats and skirts are included, making the carcase automatically heavier.”

Another question raised by Mr Atkinson was why dressing percentages were dropping in Australia.

“It’s all very well to satisfy halal requirements and secure our markets but at the same time we are getting much less for our product,” he said.

“I would also like to make the point that the low prices paid to producers through most of the last decade has meant that they have had to take on more debt to run their business and to a degree have subsidised the cost of beef to the consumer.”

Many producers argued mandatory price reporting was a must if there was to be any trust between producers and processors.

“We are a food supply chain - it is imperative that everyone along that chain is profitable,” Mr Atkinson said.

“There is a lot of transparency as far our operations are concerned but we know very little about the processors’ profitability,” he said.

“I’m certainly not talking about the current environment but often we feel processors could be paying more for cattle.”

He said the United States, and the European Union, saw fit to operate under such a system – and the producer’s share of the retail dollar was a lot higher there.

Townsville’s Peter McHugh said price transparency was the single biggest issue and mandatory price reporting, of cattle prices plus domestic and export wholesale boxed meat prices, was the answer.

“Everyone has to make a profit but not at the expense of someone else along the supply chain,” he said.

“We simply all have to know who is getting what share of the market.”

Feeder steer producers Carolyn and Andrew Burnes, “Bulls Gully”, Quilpie said producers had just come out of devastating drought and were in financial difficulty so the timing of this discussion was not ideal.

“Let producers enjoy the prices at moment and get back on their feet,” Mrs Burnes said.

“In the middle of the drought, producers had to find ways to make it work themselves and no one came to us for this discussion then so that is why a lot of producers are a bit offended now.

“But going forward, the concept of leveling out prices has some merit, although it will require an awful lot more thought and consultation.

“For any sort of floor in the price to work, there needs to be transparency otherwise no one will come at the trust thing - producers will naturally believe they are getting the wrong end of the deal.

“Mistrust is only ever a lack of knowledge.”

One problem with any mechanism to level out cattle prices would be complacency, Mrs Burnes said.

“We all know it is the tough times that make people step up and think outside the square,” she said.

Mrs Burnes said the scientific approach to carcase measurement and the feedback that would provide was a big step forward.

- Why transparency will not iron out the peaks and troughs of the cattle market 

Next week: How objective carcase measurement will take the subjectivity out of grading and why value based marketing is the future for beef.