News

MLA project to explore mandatory price reporting

James Nason, 05/08/2014

food safetyA new Meat & Livestock Australia project will assess whether mandatory price reporting arrangements similar to those operating in the United States could work in Australia.

Calls for greater price transparency in the beef supply chain were a common theme of producer feedback during public hearings held for the Senate inquiry into grassfed beef levies and structures in March, May and June.

In response to those concerns Cattle Council of Australia has asked MLA to fund a project to assess price transparency in the industry and to analyse options for increasing price transparency, including a cost-benefit analysis of introducing mandatory price reporting arrangements in Australia, similar to those operating in the United States.

A new tender document on the MLA website calls for suitably qualified consultants or research organisations to submit proposals to undertake an assessment of price transparency in the beef supply chain.

The tender document says the project aims to assess “whether there is a lack of price transparency in the beef supply chain and, if so, identify points in the supply chain where greater price transparency is needed to provide clear price signals to producers to inform their production and marketing decision making and improve farm gate returns.”

It says the project will explore the costs and benefits of options to improve price transparency, including mandatory price reporting.

Additionally, the project’s terms of reference state that in particular, the project will identify how improved price transparency might impact on farm gate returns.

The project will also advise on other possible mechanisms to improve price transparency, such as development of new marketing channels for producers,collection and reporting of new information and reporting of new analysis such as yield or ‘cutout’ value estimates.

Applications to undertake the research are required by submitted by Friday, August 22, with the research to be completed by the end of November.

In a statement to Beef Central, Cattle Council of Australia said researching ways to improve price transparency was an important issue to consider.

“The issue of price transparency within the beef supply chain has been raised directly with Cattle Council through consultation at Producer Forums and the Senate Hearing for the beef levy inquiry,” the CCA statement said.

“Price transparency is a complex issue and Cattle Council has requested that MLA provide a detailed analysis of the various mechanisms that may be used to improve price transparency for us to consider.”

Among those calling for mandatory price reporting during the recent Senate inquiry was NSW cattle producer and former Australian Beef Association chair John Carter, who proposed the adoption of similar legislation to the US Packers & Stockyards Act as a possible template for Australia’s cattle industry.

“Processors buying and selling the product have got the real control,” John Carter told the Senate inquiry. “It’s only through bringing in transparency in market reporting… that you can really make an impact—and that lies firmly with government.”

Queensland cattle producer Rob Moore has also been at the forefront of producer calls to improve price transparency. He is currently seeking industry and Government support for his draft Primary Production Pricing bill, which would require processors to post prices for all slaughter cattle purchase orders they have available to a single offer board. Producers would then have the ability to choose whether to supply an order at the posted price. Mr Moore believes the system would improve price transparency and competitve tension.

In a recent article for Beef Central, US columnist Steve Kay looked at the form and function of the US P&S Act and offered his opinion on whether it would have application in Australian circumstances.

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Comments

  1. David Farley, 05/08/2014

    Hooray and Bravo good progress
    Cattle Council could consider taking the project to the Australian Productivity Commission as their skills in price discovery research within the grains and sugar industries are excellent
    Accurate and timely price discovery will improve producer profitability and encourage new investments into the processing sector
    Right move in the right direction for a new and profitable future

  2. Rob Atkinson, 05/08/2014

    This is great news for beef producers.

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