Increasing transparency throughout the supply chain is the key to reassuring producers that the price they receive for their cattle is a fair price on the day, this morning’s public hearing of the Senate Select Inquiry into Supermarket Pricing at Orange, NSW, was told.

Cattle Australia CEO Dr Chris Parker said having the ability to easily compare a range of selling techniques against a standard criteria would be useful for grassfed cattle producers.

“There are a range of ways to sell your cattle, (but) it is very hard as a producer to compare which is the best,” he said.

“Particularly where you might have other things coming into it like carcase traits, and objective carcase measurement and those sorts of things, and there is not always a huge amount of transparency in that space either.

“And so for producers to be able to compare say an over the hooks price versus even just the EYCI, it is often difficult to be able to make management decisions.”

A lack of forward selling mechanisms also limited options for cattle producers.

“Even now if you look at a report from the different saleyards around the country, things are reported slightly differently,” he said.

Some reported prices in carcase weight, some in liveweight, some in dollars per head.

In terms of direct cattle producer dealings with supermarkets, Dr Parker said he was aware that a lot of producers had been providing cattle on contract to Woolworths and Coles for many years and were extremely happy with those relationships.

“Now I don’t quiz them, (but) I would suggest it probably provides them with surety over time,” he said.

“They know what they’re going to be getting and there is a discussion clearly as there always would be.

“Those of us who maybe sell through saleyards are probably a little more exposed to the vagaries of those market forces, and of course then there is a number of other ways including online selling and all those sorts of things now that are available to producers.”

Cattle Australia CEO Dr Chris Parker

He said what cattle producers seek is a fair price that is reflective of their value at the farm gate.

“So if you are getting a value at the farm gate and then you see a steak for sale at $35 a kg, how do you as a producer have a sense that you’re getting fair value back to farm gate?”

He said more transparency in the supply chain would give people a better understanding that the price they are getting is fair.

Asked if Australia should be adopting US style regulatory approach such as the US Packers and Stockyards Act, Dr Parker said the US market was very, very different to Australia, as it was fundamentally domestically focused, highly regulated and highly subsidised.

In Australia the export market accounts for up to 75 percent of all beef sold annually.

Asked directly by WA Senator Glenn Sterle if CA was raising issues over pricing with major retailers, Dr Parker said at present the organisation’s primary interactions with supermarkets are focused on emissions and land management commitments.

He said that in trying to represent the 52,000 grassfed transaction levy paying cattle producers the small team at CA had to pick which things to focus on.

“I think there are more productive discissions with supermarkets and others in the supply chain around the commitments we will make around climate and making our commitments in that space.

“We believe that the greater transparency that is in the market place across the supply chain is useful, and that is useful for producers for the reason I said before which then allows you to make informed management production decisions on your own farm.”

He said he believed the role for Government in this issue is to consider what it can do to improve price signals to producers.

“So it is not market intervention, it is actually intervention to provide the most accurate price signals producers can get.

“If that then means that like in other sectors there may be some reporting associated to it, then who looks after that and who does that I think we’re agnostic on.

“But we would think that Government intervention should be in that research provider capacity issue side of things, rather than direct market intervention.”

In response to a further question about whether supply chain transparency information should be shared only with the cattle industry or be made available for all to see, he preferred the latter.

“I would think why wouldn’t we allow consumers to see the same sort of information so they can see that they are paying a fair price for the steak and no one is gouging.

“Again it is about surety for the supply chain so everyone sees as much as they can and that is reasonable in a business sense.

“So some mechanism to provide signals for consumers that is a fair price, is that a terrible thing?

“I wouldn’t want to see it interfere in a market, but around signals and around research in that space, what is wrong with that?”

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