Letters to the Editor

Letter – Transparent supply chains needed to address diabolically low prices

Lee McNicholl, 20/05/2014

Australian beef producers are in a state of financial unsustainability due to diabolically low Aussie “farm gate “ prices, which are the lowest received in all of the major cattle producing countries. Most of our competitors are enjoying record prices on the back of low international herd inventories and rising demand for beef.

For instance, in the US this week a 600 Kg slaughter steer fetches Aus $2100 with a 365 kg feeder steer bringing Aus$1600. The Australian prices are $1335 and $700 per head.  In the more competitive US market place, industry bodies estimate that producers retain 49% of the retail value of the finished carcass. In Australia, it’s a pathetic 26% according to MLA. Increasing costs and a diminishing share of the retail value of our product are clearly responsible for the continuing demise of the Australian cattle industry, and in my opinion is the fundamental reason the beef sector is sinking under an unsustainable debt burden exacerbated by drought and the live export debacle.

Eion McAllister was spot on in a recent letter when he gave MLA and other ineffectual industry and government agencies a serve over their inadequate response to our industry’s crisis. They wash their complicit hands in their air conditioned offices and glibly tell already over worked, ageing producers to work harder, longer and smarter to produce more beef for less, so that we go broke quicker.

A timely opportunity to reform our industry and rebalance the scales of price justice occurs this Wednesday in Rockhampton when the Senate Select Committee for Rural and Regional Affairs meets to inquire into the value obtained by producers from the collection and disbursement of the $5/head transaction levy.

Let us hope this committee can deliver transparent supply chains that provide fair farm gate prices and accountable, democratically elected producer bodies that oversee our levy expenditures. It’s is the saddest of tragedies that our great industry advocate and reformist mate Graeme Acton won’t be there to encourage them to act. I am sure his challenging spirit will still pervade the hearings .

Lee McNicholl

Arklow via Dulacca


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