CCA calls for more information on boxed and wholesale beef prices

Jon Condon, 24/05/2016

Cattle Council of Australia will call on Meat & Livestock Australia to develop a system to capture information on boxed and wholesale beef prices.

A meeting of the Cattle Council’s board in Canberra today resolved to request MLA to investigate the development of a system to capture information, including the cut-out value of domestic and export boxed beef.

The resolution was put forward in response to MLA’s report into price transparency in the beef supply chain released today, with the project review committee agreeing voluntary price transparency was the preferred option.

Peter Hall

Peter Hall

CCA’s supply chain integrity chairman Peter Hall said Cattle Council supported a number of the recommendations, noting the wider collection of cattle and beef prices by itself would not solve the price transparency issue.

“Further steps are required in Australia to provide confidence in pricing systems – simply collecting more cattle and beef prices will not result in the price transparency issue going away,’’ Mr Hall said.

Both Senate inquiries – by the Rural and Regional Affairs and Transport References Committees – into industry structures and systems governing levies on grass-fed cattle and the red meat processing sector made recommendations on price disclosure and reporting.

Under one of the recommendations from the Senate inquiries, Cattle Council requested MLA assess options to increase price transparency in the beef supply chain – including the benefits and costs of introducing mandatory price reporting arrangements in Australia, similar to those operating in the US.

Included in the recommendations supported by Cattle Council are:

  • More producer education on interpreting carcase value on processor grids
  • Explore producing a cut-out value including co-product value for a grass-fed export steer, US cow and domestic carcase
  • Enhanced MLA and commercial marketing reporting and intelligence services, including detailed data by regions generated and provided by MLA on a weekly basis

As a direct result of the project, MLA has revamped its over-the-hooks indicator reports to make interpretations of price differences between weights and livestock categories easier for producers.

“It has become increasingly difficult for producers to compare or interpret OTH grids – uniform plant equipment, a reformed beef language and greater consistency across grids provided to producers would be the first necessary steps,’’ Mr Hall said.

He said current data available on wholesale meat prices, which producers rely on, are one month to three months old by the time producers receive it.

“The industry needs to develop a mechanism whereby MLA can access that trade information and use it to develop an averaging system across Australia.’’

Cattle Council said it considered increasing the accountability and transparency of the beef supply chain to be essential in ensuring producers receive the correct market signals.

“The whole of the beef sector needs to examine methods to improve the transparency and accountability and profitability for cattle producers and the wider industry,’’ Mr Hall said.

Cattle Council supports industry partnerships to generate significantly improved beef and cattle price transparency, with the Senate inquiry hearings outlining the lack of available data for up to two thirds of the Australian cattle slaughter.

Mr Hall said while the report indicated the complexity of the issue, it had narrowed down options available for price transparency in the beef industry.

“On the balance of evidence, it is a conclusion of this paper that producers are likely to benefit from increased price transparency in Australian cattle and beef markets,’’ he said.

“The primary price transparency gap along the beef supply chain is at the wholesale/export stage, with no data currently available.

“This is also the beef price stage closest to, and of most relevance to, the value of cattle sold by producers.’’


Source: CCA


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