NSW Beef Producer John Carter in his regular “Straight Talking” Column writes
Over the past 22 months Austalian beef producers have averaged 56% of what US producers are paid for the same feeder steer. US consumers pay less than Australian consumers. We have a production line mess between the feeder steer (cow /calf) producer and the consumer in Australia.We have a leaderless, mindless, rabble muttering ‘ We lead the world†followed by the name of the latest fad –CALM, Fututech, Vioscan, Ausmeat, MSA, NLIS, LPA.
Producers have been levied over $1.7 billion to fund these side issue hobbies of self interested insiders.Side issues they are. The US producer has none of them and is getting almost twice as much money for his feeder steer.
The people in positions of power in our meat industry have refused to do an audit of the industry despite it being a no.1 priority at think tank meetings over 16 years.
They are guilty of criminal negligence as they protect their jobs by ensuring that there are no genuine benchmarks to measure them against. Just think of the type of new abattoir and world’s best management that could have been procured with that $1.7 billion.
Australia has desperate issues that are not being addressed.
Get out a map of Australia, hold the edge of a ruler on both Adelaide and Townsville. Over two thirds of Australia lies to the West and North of that line. There is only one Ausmeat A standard beef export works left in all that territory (it is south of Perth)— and it is dysfunctional. There once were eight export quality works!
We have the ludicrous situation where cows are being trucked 2600 miles from WA to Queensland. Beef is being trucked from Queensland to Perth. It would be shorter to send the cattle to be killed in Jakarta. The wages there would be a fraction of ours.
Our stock density is very low due to our soil infertility and rainfall,giving abattoirs a real problem in sourcing livestock.
We have a drought prone country that doesn’t see cattle fattened properly for anything that is unprocessed product. We have a small human population for the same reason.
Brazil has more rain , more fertile soil and a large population . The US has all this and cheaper grain. In 1983 , Amarillo Texas had 10 million cattle on feed within 100 miles. There is nowhere in Australia where there are 1 million sale cattle within 100 miles of an abattoir.
South East Queensland was developing as a finishing area with feedlots close to abattoirs.
However,our feedlot industry has hit the wall after a repetition of the rapid growth it had before the oil shock of the early 70’s. Fuel production from grain, huge fertiliser and fuel costs will ensure that it struggles to achieve profit from feeding a relatively inefficient converter-cattle.
To be efficient, an abattoir must have throughput and full utilisation of all by products. Roger Fletcher has illustrated how it is done with his sheep plant at Dubbo.
He hauls sheep from Queenslad and Victoria to give him his throughput. He can outbid any rival by a big margin because of his efficient use of every part of the sheep.
JBS will build on the work at Dinmore where AMH were developing a Fletcher type hub. They will value add as they have done in Brazil —have cooked products, small goods. This can’t be done without big throughput.
Ideally we need four JBS type export plants-Ipswich, SouthernVictoria (to handle Tamania and the south) , one in West Australia, one in Darwin. We need a mechanism to ensure that JBS (or whoever)pay as much as they can.
We must face the fact that over 90% of Australian beef hasn’t the level of nutrition to ever reach US “Choice†grade and should be converted to consumer friendly product AT THE ABATTOIR.
A full audit of our industry is 16 years overdue and must be done before the next entrepeneur takes the poor producers for a new CALM/NLIS /MSA type ride.
We have a new, energetic Minister in Canberra who carries no baggage. Now is the time for action.
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John, What a good summary of our stressed out industry. As a director of Aust Beef Assoc., I want to get this information out to the cattlemen who don’t get these facts due to the extreme bias of the Rural press and their sponsors. These facts can be put into 30sec bulletins as commercial radio ads– they are cheap and effective! Spots either side of the Rural news and market reports on regional stations would reach meat producers all over the country. Agmates is doing its best in this regard as an alternative to the mainstream media outlets. Meat and Livestock Aus fills the rural press with paid advertorials and marginalise any critics. They would have no control over a paid radio ad, and public opinion based on truth is what they would fear most.
Whilst I agree with many things John Carter says in this article, unfortunately he is very wide of the mark on quite a few as well.
Meatworks are of a bygone era in northern Australia; there are no abattoirs all between Townsville and Naracoorte in SA; the one refereed to in WA is gone. For the record, there were 17 abattoirs in the NT alone prior to 1984, God only knows how many there were overall across the three states; they are all gone, bankrupted, closed, and mostly demolished.
It was Government policy that destroyed them, namely destocking without compensation during BTEC. The bankruptcies that flowed from that, and the ultimate transfer of then unviable cattle production properties to indigenous interests for a fraction of their true value, has seen over 70% of the land mass of the Territory now in the hands of indigenous interests; primarily tied up in national park type management structures. Some of the most productive land in the top end is now Kakadu National Park.
The cattle industry that remains in the NT is primarily live export; live export currently consumes all the production and some…, an additional meat processor sector is not viable because of a lack of available livestock even if they could match the buying power of the South East Asian live export market, which currently they cannot.
Expansion of the northern cattle herd in the short to medium term is an impossibility; it would need development 1960’s and 1970’s style which is now a pipe dream given the current political climate, land title and tree clearing policies nationwide. Only last Friday the NT government announced the deferral of any new development in the farming and livestock industries in the whole of the NT indefinitely.
If anything in the coming decades, we will witness a steady decline in cattle numbers in the north due to these policies. These policies will, in my view ultimately threaten the viability of the existing abattoirs as the numbers begin to fall as the protected timber regrowth gains momentum due to the emerging carbon credits industry; in the extreme, carbon credits may consume the cattle industry.
The abattoir industry will come under increasing pressure in the short to medium term from another source, the Feedlot sector. With the emerging reclassification of grain, particularly feed grain, as a source of energy, and the rise in price and supply shortages that will flow from that, the feedlot sector may experience viability concerns, which in turn could affect the meat processor sector and its ability to maintain a constant beef quality in its most lucrative markets.
I think an audit implies more regulation, I do not think it is necessary, the statistically information about the industry is a matter of record, what we do need is a massive reduction of regulatory control. We need to repeal the current Commonwealth legislation, including the MOU and the current industry structure, and deregulate the industry; but that would mean a change of political ideology away from socialism.