Beef producers raise representation issues

Damian Bell, a partner at Creevey Russell Lawyers, has been ‘following the money trail’ from producers’ levys and ear tags to the top advisory positions on behalf of more than 15 large cattle producers in Queensland and the Northern Territory.

His findings resonate with veal producers on the Northern Rivers also frustrated with the lack of real producer representation on the Meat and Livestock Australia (MLA) board.

Mr Bell said the spaghetti-like schematic explaining who sat where within red meat industry representation was ‘complicated beyond belief’ but one thing was clear: All levy funds flowed first to the MLA before being distributed or “drip fed” to producer representative bodies and projects.

“The board of the MLA has many highly qualified professional directors but I do not think it is representative of the producers who actually contribute the vast bulk of funds for its existence,” Mr Bell said.

“The producers that we represent, which in themselves would manage hundreds of thousands of cattle, and those that we have spoken with across the industry, are all saying the same thing,” Mr Bell said.

Other issues of significant concern to graziers was the need for independent graders and the loss of income from trim, offal and hides, with Mr Bell comparing US systems to Australia.

He noted Australian producers continued to comply under an old brokered deal with processors that appeared to essentially amount to ‘what’s on the floor is free’.

“It’s further evidence to me that producers have lost control and have been sidelined in an industry that appears to increasingly exist to process rather than produce,” he said.

Other concerns include producer frustration at trying to navigate individual meat company grids and Mr Bell cited numerous times when beef passed the MSA grading but failed a separate company grade that the producer wasn’t even aware of - always before the animal was assessed for payment.

Mr Bell said his clients were calling for independent graders and reform of the representative and industry bodies (including the implantation of the seven Senate Committee recommendations into the grassfed industry).

“There are some straight forward actions, like independent graders, that can be taken relatively quickly that can go a long way to reducing the tension between producers and processors – the industry needs them working together to be successful and sustainable.”

“I follow the dollars when I research these subjects,” said Mr Bell who has also worked extensively across the transport and grain agricultural sectors. “And it always proves fascinating around ‘who pays and who says’.”

“Producers have lost control of their industry but they can take it back if they want.”

FRUSTRATION by producers at perceived unfairness in the market created a hardy outpouring of concern at the Australian Competition and Consumer Commission’s cattle and beef market study forum at Toowoomba on Friday.

Producers shared their impression that cattlemen continually pulled the short straw when it came to payment from processors.

Abattoir bosses like Simon Stahl, CEO Northern Co-operative Meat Company, Casino, defended his side of the industry’s business behaviour and pointed out that the reality of free market trade demanded a closed book when it came to showing commercial secrets.

Central Queensland grazier Cameron McIntyre, Mt Booroomen, spoke for other producers by saying  the seven Senate recommendations aimed at the grass fed industry were like  a Christmas wish list and yet three years on none of them were fully enacted.

“Barnaby Joyce told us in Townsville that we would have to live by those findings,” he said.

“Everyone just seems to be backing away one by one. The MLA calls the shots. The industry structure needs to be changed and that will only happen when we get a strong, democratically elected board that is well financed to represent the grass fed producer.”

Mr McIntyre pointed out that as MLA banked and distributed the ear tag levy, the CCA would hardly ‘pull the trigger’ on its funding body.

“The producer has lost faith in its representative body,” he said. “The government doesn’t give us the time of day and yet we are the largest employer by far off the coast.”

LACK of buying competition for light cattle at Casino saleyards was of particular concern to Angela and Rob Seccomb, Piora, citing the purchase by Northern Co-operative Meat Company of Ramsey Meats at Grafton and Manning Foods at Casino which reduced buyers at the rail by two-thirds.

Both purchases were carried out without a vote from members and neither were share-holders told the prices paid.

“There was no disclosure and no reporting of the price,” said Mrs Seccomb.

Mrs Seccomb, sister-in-law to NCMC’s chairman, was annoyed that the meat co-operative would then refuse processing access to other buyers of light cattle which reinforced the one-buyer reality at Casino.

“NCMC is a co-operative,” Mrs Seccomb said. “It still gets grant money from the government and has access to low interest loans.

“Co-operatives have to be fair,” said Mrs Secomb. “They should open the door to kill for other people and encourage competition.”

In defending allegations about reducing competition through the quiet purchase of two neighbouring competitors, NCMC CEO Simon Stahl said the move was intended to keep business in the district.

“I am glad to see the ACCC responding to producer concerns,” said Mr Stahl.

“But at the end of the day my legal requirement is to run the NCMC as a commercial business. The matter for profit distribution is the sole job of the board and the majority of members and employees are very happy with the way the board is performing. One just has to ask how many change-overs has the board had in the last five years other than from retirement?”

ARCHAIC practices by producers in measure fat, like a scalpel and a ruler,  only led to incorrect price payments, said producers at Friday’s ACCC’s cattle and beef market study forum at Toowoomba.

Inaccurate reporting of teeth was another concern.

Alan Sorely, Bell, disagreed with the general sentiment saying producers could witness the grading of their cattle as they went down the chain.

Meanwhile Cameron McIntyre, Mt Booroomen, noted that technology would rectify many of the current issues, but ‘unless both sides have input into the new system it will be construed as benefiting the other party’.

“We need to solve the friction problem,” he said. “Nothing will change with technology alone.”

SIMON Stahl, CEO Northern Co-operative Meat Company, Casino, asked commissioner Mick Keogh of the ACCC how it could decry the beef industry’s fluctuating prices when bananas regularly jumped from one to ten dollars per kilo.

Bringing in mandatory reporting of pricing, however, would cruel the processing industry.

“Our product is so diverse, it is sold fifty to sixty ways,” he said. “What will it fix? It will just add cost to the supply chain. I wouldn’t mind if there was a real net benefit.”

Mr Stahl said full price disclosure would breach a company’s commercial in-confidence policies.

“You don’t tell your competition that sort of information,” he said.

Dean Goode, CEO Kilcoy Pastoral, said price disclosure would only mean overseas buyers would have access to key business information and would ‘slowly apply pressure on a downward price’, he said.

As far as ironing out price fluctuation, Mr Stahl said that was in everybody’s interest - producers and processors alike. “We could all plan ahead,” he said. but in the cold hard world of commodity trading that was never going to happen. And a single desk model had failed with wool and wheat so why bring it to beef.

At the same time Mr Stahl supported the free market, and embraced live export as another producer option.

“We buy less than 5 per cent of Australia’s light cattle he said, defending allegations that NCMC controls veal price. “And yet young cattle are 50 per cent of the trade. It is the restockers that set the price. If there is no grass there are no restockers in the market.”

Mick Keogh, ACCC , said a draft report on the commission’s findings would be published later in the year.