YEARS of feeling at the mercy of an opaque beef pricing system came to a head late last year for Queensland grazier Rob Moore, Bollon, when drought forced his hand.
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Like many others, Mr Moore and his wife Leanne unloaded all their young stock, representing their 2014-15 income, at a price below the cost of production.
Since then, drought has deepened, and the options for recovering from it have diminished further.
If the cattle selling system had some transparency to it, Mr Moore reasons, he might have made more money, giving the Moores' 17,000-hectare property "Grassmere" more financial resilience in crisis.
And he might have been able to sell that last lot of cattle more advantageously.
Haunted by the possibility, Mr Moore has done research into a system he believes "will let price discover the cattle, rather than cattle discover the price".
Hunting for a system to level the market playing field, Mr Moore found a lot to like in the United States' "Packers and Stockyards Act", which regulates livestock transactions in the US.
The Act was enacted in 1921 after President Woodrow Wilson ordered an investigation of the meat packing industry from "hoof to the table" to determine whether or not there were any "manipulations, controls, trusts, combinations, or restraints out of harmony with the law or the public interest".
Manipulations and other disharmonies were found. The first role of the Packers and Stockyards Act of 1921 was "to safeguard farmers and ranchers from marketing practices which would deprive them of the true market value of their livestock".
The Act is a complicated, encrusted piece of legislation. Mr Moore wants a conversation about stripping the US model back to its bare essentials and reinventing them for the Australian cattle industry as the Primary Production Pricing Bill (PPP).
The PPP would share the aims of the US Act - price transparency and equal access - but on a simplified modern platform.
Mr Moore envisages the saleyard system would continue, but all other cattle transactions would be mandatorily made through a "single desk" computerised offer board - a sort of eBay for cattle, within the rules set by the PPP.
He sees the system working like this:
- Those buying cattle - processors or feedlots - would put up a contract on the online offer board, detailing number of head and specifications according to a price grid.
- Cattle producers view the contract online. Those with cattle that meet the grid, and who like the price, can log in the numbers they want to sell. Identification is done through the property PIC number.
- The system is strictly first in, first served. The US Act rules out the selling system "giving undue preference to any person or locality". So, if a 1000-head order is posted and a Queensland producer quickly locks in 600 head, he has secured the majority of the contract. The remaining 400 head are allocated on the same basis.
- Fail-safe systems would need to be in place. Transactions might be rated, eBay-style, Mr Moore suggests, and a buyer might have the option not to deal with a seller with a bad rating. A disputes resolution system would also need to be developed.
- The system would maintain a running, real-time historical record of transactions.
Mr Moore believes for the system to work it must be mandatory for all non-saleyard transactions.
Those producers who currently have good direct marketing arrangements might be unhappy with the concept, Mr Moore acknowledges, but he thinks a buyer could post such tight specifications on the offer board it would exclude all but a trusted long-time supplier - or perhaps, discover another competitive supplier of stock.
Much of the point of the system would be to establish the true price of the cattle market, with the aim of moving cattle producers out of their traditional position as price-takers.
"Unless something changes, us and a lot of other cattle producers won't be producing," Mr Moore said.
"It's that simple."
After some vigorous online discussion, Mr Moore floated his proposal publically for the first time at the drought crisis meeting in St George at the weekend.
Beyond improvement north of the border
ROB Moore reckons he's done everything that's been asked of farmers throughout his 35 years at "Grassmere", north of Bollon, Queensland.
So why, he asks, should this drought be such a threat?
Mr Moore, his wife Leanne and their three children, have innovated, improved productivity and kept their financial slate clean.
The Moores target high-value European Union markets with their cattle, mostly selling direct, and similarly market Texel/ Border Leicester lambs.
They have run 120 kilometres of pipe to 120 watering points across their 17,000-hectare property, to improve management and feed utilisation.
Most strikingly of all, out in this tough mulga country, a long way from a big river, Mr Moore has set up a centre-pivot system that harvests water from creekbed dams when the opportunity arises, to grow forage crops for silage.
But despite running as hard as he can for 35 years, Mr Moore said years of low returns topped by severe drought now confront him with the choice of restocking - with no promise of ever getting ahead - or winding up before he digs into a debt hole.
He believes the situation faced by his family, and many others, comes back to constant downward pressure on farmgate returns - hence his Primary Production Pricing (PPP) bill.
In the current climate, Mr Moore said, all the pricing advantage lies with corporate interests beyond the farmgate.
The PPP is an attempt to put livestock producers back on the market floor, instead of sitting outside it.
Matthew Cawood
National writer for Fairfax Agricultural Media.
National writer for Fairfax Agricultural Media.
