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Processors publishing price grids a good start, but more work needed: Keogh

James Nason, 19/09/2018


Video: Mick Keogh opens the 2018 Henty Machinery Field Days

 

Australian Competition and Consumer Commission deputy chair Mick Keogh has greeted recent moves by a handful of red meat processors to publish direct price grids on the internet as a “good start” towards improving transparency for producers – but says there is still more work to be done.

ACCC deputy commissioner Mick Keogh, who grew up on a family farm just down the road at Holbrook, officially opened the 2018 Henty Machinery Field Days at Henty on Tuesday.

Three significant red meat processors have now acted upon a recommendation from the ACCC’s cattle and beef market study to make price grids more accessible to every livestock producer – Teys Australia, Bindaree Beef and Thomas Foods International.

In May the ACCC published an update report criticising the lack of industry progress towards voluntarily adopting the ACCC’s 15 recommendations, including grid disclosure.

Mr Keogh told Beef Central at this week’s Henty Machinery Field Days, which he formally opened on Tuesday, that the decision by TFI, Bindaree and Teys Australia to publish price grids was a good start.

“That wasn’t the whole picture of what we were after, we certainly think there needs to be a fair bit of work done in the industry on some of the issues around saleyards and some of the reporting of over the hooks sales,” he said.

“But that is a great start.”

While there had been many concerns voiced by the processing industry in opposition to the grid disclosure recommendation, Mr Keogh said the experience so far suggested there had not been the negative impacts many feared.

“A lot of people said there will be all sorts of trouble and all sorts of difficulties, but my understanding is that TFI have not run into any issues and Bindaree have been doing it for quite a while and Teys have now been trialling it.

“I think the predictions of major issues as a result haven’t arisen, and I think that increased transparency gives cattle producers a better option in terms of understanding what is happening in the market.

“It is only a small thing, it is not changing the world, and I just think that sentiment of being fairly transparent and having that information more readily available is quite important for the future of our industry.”

Buyer register and national licensing of stock agents key priorities

Mr Keogh said a critical issue the ACCC was hoping to see more progress on surrounded the question whether or not a buyer register should be created to manage the issue of commission buying, which he said livestock agents were onside with.

Tied in with this was the need for standard national licensing so the industry itself could then take action by way of delicensing participants when behaviour fell outside scope of what was acceptable.

“They (livestock agents) are as frustrated as we are at the moment that that can’t happen because, apart from a couple of states, there is no licensing (of agents).

“We’re talking to the Council of Ag Ministers in October and have a paper presented to them, so we’re starting to advance these issues, and particularly the national licensing of agents.

“That is very much is a state licensing issue and it has been tried a couple of times and they haven’t made any progress, so this time hopefully we might get somewhere”.

 

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Comments

  1. Paul Wright, 21/09/2018

    Cattle Producers Australia Ltd (CPA) support the recommendations presented in the ACCC Cattle and Beef Market Study, Update Report and commend ACCC Commissioner Mick Keogh for advocating for much needed market price transparency reform in our industry. CPA also congratulate those members of the processing industry who have chosen to publish their direct pricing grids. CPA will be pressing for further necessary structural red meat industry reforms that are required to strengthen our industry into the future.

  2. Loretta Carroll, 20/09/2018

    Congratulations to Commissioner Keogh for driving reform in our industry. The ACCC Update Report identified long-standing industry practices that require reform such as transparency of price and other key market information. The report states transparency is a prerequisite for functional markets and effective competition and it goes on to say that this information should be available right along the supply chain and if provided accurately will provide clearer signals for producers to improve overall farm management and allocation of resources. This should not be too difficult to achieve, we only need industry players to accept these recommendations. Industry players need to understand the plight of producers who have to manage vast areas of natural resources under varying conditions of drought and other environmental challenges and support strategies that will improve long-term viability of cattle production in Australia.

  3. Glen Salisbury, 19/09/2018

    Good to see some processors responding. Some of the other recommendations by the ACCC (like simplifying grids and feedback etc) may be a bit unrealistic. Australian beef needs to have complex grading to separate it from other countries. But we should all be able to agree that public pricing is a step in the right direction. People have even created groups on Facebook, like “Cattle Grids Australia” to share grids to spare them hassle of getting them from buyers.

  4. Dave Jeffs, 19/09/2018

    The question is not really one of transparency, but a question of efficiency. If you’re a producer, you should be able to eventually receive grids from buyers. But getting them all lining up at the same time can be tricky. It may take up to a week to be emailed a grid from a buyer, so by the time you get it, your other grids may be out of date. I think this is something that some processors may not understand, particularly when dealing with us smaller producers who aren’t really top of mind for them. Anyway, food for thought.

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