I spoke with Meat & Livestock Australia Chairman Don Heatley to discuss the implications of the Global Credit crisis for Australian Livestock producers:

.

.

.

.

.

.

.
.

.

Agmates:
Do what are you seeing as the implications on our markets of the credit crisis?

Don Heatley:
Domestically we are not seeing the drop in the dollar as having any impact yet. However as the economy tightens we may see a trend for meat to be eaten at home rather than out at restaurants. In fact there is some evidence that is happening now.

From an export point of view its a little early to say yet what impact the credit crunch may have on the supply chain. The product that is currently on the water is fine, but as to how a thightening of lines of credit affects the processors, that would be pure speculation at the moment.

There is nothing we can do there but wait and see what impact that has if any on new orders.

Agmates:
As Chairman of MLA and as a fellow beef producer what advice would you give to livestock producers in these troubled times.

Don:
As a fellow producer the thing I’d say to people is to stay calm. Don’t do anything rash. These are unchartered global waters and its not a time when you want to be making rash decisions - so yes my advise would be to stay calm, don’t do anything silly and keep your business running well.

Our meat industry is 65% reliant on exports and we really just have to wait for any affect to flow back through the global supply chain.

Having said that people should remember that a third of the market for our meat is domestic. That market is strong.

Agmates:
What are your thoughts on Prime Minister Kevin Rudds announcement last night to guarantee all bank deposits for the next three years.

Don:
There’s no doubt in my mind that the PM has done nothing but a tremendous amount of good with the action he announced.

What we need at this time is calm economic management and planning. The announcement will have a calming affect on the industry and thats exactly what is required right now.

They great danger was that sectors of the industry and individuals might panic for no other reason than what they are seeing happening in the media. Fear creates fear and panic creates panic, the two feed on each other when behind it all there is no sound logical reason for it.

The PM with his announcement has steadied the ship and thats exactly what was needed.

Agmates:
Thanks Don, the Agmates community appreciates you sharing your thoughts with us in these unprecedented and historic times.

.

Have Your say!

.

Got a tip off, article or have you seen a video or item you’d like to be seen by the Agmates Community? If so please email it to us at news@agmates.com

Just received this update from Damon Whittock at Meat & Livestock Australia on the possible impacts of the Global Credit Crisis on Australian Livestock Producers.

.

.

.

Agmates Livestock Producers:

The economic slowdown that is gripping almost all western economies is set to have a significant impact on meat demand, as consumers alter their consumption and spending patterns.

With the US and Japan expected to be the worst affected by the slowdown, demand for Australian red meat is likely to be impacted, especially for higher value beef and lamb products.

The impact of the slowdown on demand has already commenced, with an increased volume of manufacturing beef sent to Japan and stronger prices for this product to Japan and the US, as consumers trade down to lower valued products.

In the first nine months of 2008, Australian manufacturing beef exports to Japan are up 14%, making up 35% of total exports, compared to 30% and 28% in 2007 and 2006, respectively.

The majority of Australian beef exports to the US should benefit, with manufacturing beef used in the cheaper fast food sector.

The negative impact of the slowdown is likely to be felt across the smaller, but growing, cuts trade, along with demand for lamb.

Domestically

Foodservice and retail tracking reports have also indicated a significant shift by consumers towards cheaper meat products, with fast food outlets the only foodservice segment to report an increase in beef usage during the first half of the year, with lamb usage well down.

Regards,

Damon

.

Have Your say or as a question?.

In what can only be described as a scandalous act of deception it has been revealed that the IPCC has grossly overstated global livestock emissions.

The FAO report, Livestock’s Long Shadow, [pictured] made public last year to world acclaim, states that livestock contributes 18 per cent of the global warming effect, even more than transport.

But buried in the report is the information that deforestation - mainly in the Amazonian rainforest - is included in that figure. Without it, livestock’s contribution falls to less than 12 per cent.

.

One of the report’s main authors, Pierre Gerber, a Food Agriculture Organization of the United Nations livestock policy officer, has been openly critical of IPCC Chairman Dr Rajendra Pachauri and others, saying they had misused the information in the report.

If you recall, based on the report Dr Pachauri [pictured] an Indian Economist and Vegetarian has been campaigning for the world to eat less meat to fight global warming.

In Professor Ross Garnaut final report last week he devoted an entire section to cutting Australia’s livestock emissions, extensively quoting the trumped up 18% figure for Australia’s livestock emissions.

This is just another example of how the IPCC has distorted and misconstrue the science. Yet they still maintain credibility. This is the science that Kevin Rudd and his Labor team are relying on to set policy in Australia.

The emissions trading scheme Rudd intends to introduce in just 14 months time will cost ordinary Australians $5 billion dollars in Carbon Taxes in the first year. Based on this kind on dodgy representation of the science, it will be an abject disaster, particularly for Australian Agriculture.

.

(thanks to Agmate - Jeff)

.

Have Your Say!

.

Got a tip off, article or have you seen a video or item you’d like to be seen by the Agmates Community? If so please email it to us at news@agmates.com

QLD Senator Ron Boswell [pictured] has written to Agmates about Ross Garnaut’s fanciful suggestion that Australian farmers graze Roo’s instead of cattle and sheep.

This article has earned Senator Boswell our latest Agmates “Onya” award.

In the article he demonstrates a particularly deep understanding of how the Australian Farming industry works. This understanding is something that Garnaut and the green brigade supporting this fanciful idea obviously lack.

KANGAROO FARMS - A EUREKA MOMENT FROM GARNAUT

The Garnaut Review suggests that Australia takes 9.1million hectares out of current land use to grow trees and that we run 240 million kangaroos instead of 7 million cattle and 36 million sheep. This is a daft proposition totally removed from reality.

On Page 547 of the Garnaut Review, it says:-.

“They conclude that by 2020 beef cattle and sheep numbers in the rangelands could be reduced by 7 million and 36 million respectively, and that this would create the opportunity for an increase in kangaroo numbers from 34 million today to 240 million by 2020. They estimate that meat production from 175 million kangaroos would be sufficient to replace the forgone lamb and beef meat production …”

.

It reads more like a sci fi horror movie than an intelligent policy proposal.

Firstly, taking 9.1m ha to grow trees will savage agricultural food production, hurting domestic food security as well as that of our overseas buyers.

Secondly, the idea of running kangaroos on such a massive scale beggars belief.

• All the fences would have to be trebled in height for starters.
• New investment in saleyards, kangaroo trucks and abattoirs would be required.
• Even tagging poses problems if the National Livestock Identification Scheme applied.
• I don’t think the Australian people would like to see their national symbol branded with a branding iron.
• Producers would have to establish stud breeder criteria and registration, artificial insemination procedures and so on.
• Kangaroo stewards at Royal Agricultural Shows would need to be trained and appointed and probably protected as they led the Show Champion Kangaroo around the ring.

Woolworths could re-badge themselves as ‘The Fresh Roo People’.

We would have to invest in new advertising to market our product overseas, perhaps along the lines of ‘Put another roo on the barbie’ or ‘Where the bloody hell are roo?’

Seriously, can you take this report seriously?

How do we sell the need to adapt to climate change when the leading advice contains this fantasy?

END……….

For that great piece of common sense Senator Boswell joins out prestigious list of Agmates “Onya’ Recipients.

In fact this is Ron’s second “Onya” award. (to date the only person to have won two).

So “Onya” Ron from the Agmates community. A big Thumbs up.

.

Have Your Say!

Got a tip off, article or have you seen a video or item you’d like to be seen by the Agmates Community? If so please email it to us at news@agmates.com

Exports of Australian beef to Russia are surging on that back of that countries increasing national prosperity.

Despite a recent drop in exports the future for Australian beef in the Russian market is still strong, according to the head of the Russian National Meat Association, Sergey Yushin [pictured below].

.

.

.

.

.

.

.

.

.

Mr Yushin, who will be visiting Australia in November for Meat and Livestock Australia’s Meat Profit Day in Orange NSW, is set to provide Australia’s livestock producers with an insider’s view of the emerging Russian meat market.

Russia has emerged as Australia’s fourth largest beef export market this year, taking 61,405 tonnes during the calendar year to August, of which 7,567 tonnes was exported in August. In comparison, Australia had sent only 942 tonnes to Russia in the year to August last year.

During his visit Mr Yushin will explain how beef consumption in Russia is growing as the economy in that country continues to improve and disposable incomes increase.

.

“During the last five years, according to the official statistics, the average Russian’s income has grown from 125 dollars to more than 500 dollars per month. During this time meat consumption has been strong and growing, Mr Yushin said.

The outlook looks bright, with the Russian Ministry of Economy forecasting that by 2020 disposable incomes will grow by 1.8-2.4 times and wages will grow by 1.9-2.9 times.”

.

(more…)

Ross Garnaut understanding that under the proposed Emissions Trading Scheme rural and regional Australian communities are “Rooted” .

He has sunk to the depths of ridiculous in ways he believes Australian farmers can benefit from the scheme.

Read the Garnaut report, in it he indicates that those farmers running cattle and sheep are in for a very tough time from day one and will be completely un - viable after Agriculture is bought into the scheme around 2013. From that point farmers will have to buy permits to cover their livestock Methane emissions.

His solution is laughable - switch from cattle and sheep grazing to Kangaroos.

.

AUSTRALIANS should replace beef and lamb on the dinner table with kangaroo to fight climate change, Kevin Rudd’s chief climate change adviser says.

They conclude that by 2020, beef cattle and sheep numbers in the rangelands could be reduced by seven million and 36 million respectively, and that this would create the opportunity for an increase in kangaroo numbers from 34 million today to 240million by 2020,” he says.

.

Below is a photo of Skippy fattened on Salt bush.

Garnaut in his report is desperate to find some glimmer of hope for farmers. This purely fanciful suggestion is testamony to that.

Garnaut notes there are some barriers to the switch to Roo meat. As stated by the good professor they are:

.

Livestock and Farm Management issues

Consumer resistance

and a gradual Nature of change in food tastes.

.

This whole business would be hilarious if it wasn’t such deadly serious nonsense. Farmers need solutions to their long term viability now not in 3 generations time when consumer food tastes change.

Garnaut knows farmers are the “sacrifical lambs” in this ETS sham. Garnaut admits the ETS will have zero impact on Global climate.

He also knows that Farmers and rural communities will be crucified by the scheme, which is chiefly desinged to give the Rudd Government global green kudos and Australian Urban dwellers a warm and fuzzy green glow.

What a national disgrace.

(thanks to Agmates reader MattB)

.

Have your Say!

.

Got a tip off, article or have you seen a video or item you’d like to be seen by the Agmates Community? If so please email it to us at news@agmates.com

Australia’s largest cattle producer AAco has increased its Wagyu full blood and purebred production capacity by 50% with the purchase of the 850 head 4JS herd.

The herd is a mix of pureblood and full blood Wagyu cows and calves, replacement heifers, steers and full blood bulls and will be re-located to AAco’s Surat property, Wylarah, where the primary focus is Wagyu.

The 4JS genetics will add to AAco Wagyu genetic pool at Wylarah which was bolster with the purchase of the well known genetics of the Westholme herd in 2006.

In a company announcement yesterday AAco CEO Stephen Toms [pictured] said:

.

“AAco has a 30% market share of Australian Wagyu sold. AAco’s major Wagyu brands of Master Kobe, Kobe Cuisine, Darling Downs Wagyu and the joint marketing programme in the USA under the Greg Norman Signature Wagyu label will benefit from this initiative.

The majority of Wagyu produced in Australia is for export and this acquisition will further strengthen AAco’s presence in the lucrative higher quality markets of Hong Kong, Korea, Indonesia, USA, the Middle East and evolving opportunities in Europe.”

.

AAco is very upbeat about the increase in cattle & beef prices due to the fall in the Australian dollar and early rainfall and good seasonal outlook for its Queensland properties. Even its drought stricken Northern Territory Barckly tableland properties have had some promising early showers.

.

Have Your say!

.

Got a tip off, article or have you seen a video or item you’d like to be seen by the Agmates Community? If so please email it to us at news@agmates.com

.

.

.

BEEF WARS

What is going on with the ongoing feud between some Australian beef producers and its own peak body Meat and Livestock Australia.

MLA was established with the assistance of the commonwealth government to act as the peak body for Australia’s meat producers. MLA is funded by a compulsory levy paid by every producer on livestock sales.

MLA is well funded and well staffed with marketing offices across the globe. Last years Financial report shows that total revenues were $161 million with $98m coming from producer levies, $11m from processors and just over $1m from live exporters.

According to last years financial’s the board spent $96m of those funds on marketing Australian meat abroad and domestically and about $20m on reaseach and development.

.

.

.

.

.

.

.

The company is run by a stable, competent and well qualified board of directors with North QLD cattleman Don Heatley [ pictured above] having been on the board for a decade and Chairman since 2005 . Indeed of the 10 board members 5 of them own farming enterprises. The other 5 board members have long term involvements in the meat industry as processors, scientists or in corporate agriculture.

As an industry funded representative body on the surface of it you’d have to say they don’t get any better than MLA. A case in point is that the MLA spent $116m last year on marketing Australian meat and research and development. Contrast this to the USA whose livestock levies raised just US$45 million to be spent on the same activities.

Things however are not all back slaps, steaks on the barby, cold bear and happy times in the meat industry. In the run up to this years Annual General meeting in November MLA’s long standing dispute / battle with disgruntled cattle producer group Australian Beef Association (ABA) has flared up again.

ABA with signatures of 160 MLA members and levy paying livestock producers has proposed three controversial resolutions be put to members at the upcoming AGM.

Sensationally those resolutions call for a “Vote of no confidence” in the entire board and the removal of Chairman Don Heatley and Managing Director David Palmer from the board?

Below we quote Directly from the resolutions submitted by the Australian Beef Association. Broadly stated these are the issues at the heart on the ongoing tensions between ABA and MLA.

.

1. Lack of Accountability. Despite attempts over ten years and in 2002, eight Senate Select Committee recommendations for change to accountability, the Board has not corrected this lack of accountability.

2. NLIS Disaster. We were told by MLA that NLIS was required for us to have access to foreign markets. The USA and South America, with no NLIS, are accessing these markets and getting higher prices than Australia. MLA has refused to acknowledge our concerns at the seriously flawed implementation of the NLIS program and have refused to release the $80,000 study by Ernst Young into the NLIS poll rort by two MLA staff members (who were not dismissed).

3. Cattle Price - Promotion Failure. MLA had our levy raised by 40% in 2005, in a vote taken outside MLA’s Constitution. The Board claimed that it was needed to promote our beef. Since then, their misplaced domestic beef promotion has seen supermarket margins rise and producer prices fall. The non-appearance or contribution by MLA to the Beef section of the ACCC Grocery Inquiry confirmed the “sell out” of its members.

.

The board has refused to accept the resolutions with Chairman Don Heatley saying ” they are defamatory or fail to meet the legal requirements for a members’ resolution.”

As a consequence the resolutions will not be voted on at the AGM or the issues discussed.

The board has also raised the ire of some producers by accepting a resolution to be put to the members to increase the combined remuneration paid to MLA directors by $250,000 per annum.

(*Note: see Clarification Correction below on this resolution and actual directors remuneration From the MLA - thanks Damon)

I must say that I do find it quiet extraordinary that the MLA financials posted on their web site do not quote what individual directors are paid.

However our information is that the last time it was available was in the 2004 report. That report quoted the Managing Directors remunerated for 2004 was $489,000 with the other 10 directors sharing $500,000 between them.

The new resolution if passed will see the chairman and 9 directors share a pool of $750,000 as directors fees per year.

One can only assume that the managing directors salary of $489,000 will remain unchanged. This is not an inconsequential amount as the chairman is paid 48% more than the Prime Minister Kevin Rudds who’s salary is $330,000 per annum.

Its time that this long running dispute between ABA and MLA was sorted out. As it will not be dealt with at the AGM, I’m posing these questions for meat producers here online.

.

1. How wide spread is producer dissatisfaction with the MLA boards performance?

2. Do you support the motions put forward of a vote of No Confidence in the MLA board and the removal of the Chairman and the Managing Director on the grounds stated?

3. Do you believe the MLA lacks accountability?

4. Do you believe the NLIS is a disaster?

5. Do you believe MLA has ’sold out’ to supermarkets, big corporates as suggested in the resolution?

.

(Thanks to readers Sam, Rod, Monica, John and others)

……………………………………………………………………..

Update @ 5pm today. -

MLA has emailed the following “Clarrification” / correction re resolution of Directors remunerations.

.

.

.

Dear Steve,

I have just read the posting titled “Beef Wars’ on Agmates and there are few points that are incorrect that’d we’d ask to be corrected.

The first point is in relation to the statement that the MLA Board are “…accepting a resolution to be put to the members to increase the combined remuneration paid to MLA directors by $250,000 per annum.”

The company has fixed an aggregate limit on the amount of remuneration payable to the directors (excluding the Managing Director). The current maximum aggregate amount for directors’ fees is $500,000 per annum. This amount was approved by members at the AGM in 2000 and this is the first year that an increase to the aggregate amount has been proposed.

Member approval is being sought to increase the maximum aggregate payable to non-executive directors to $750,000. If the resolution is passed the Board will not use the maximum amount at this time, but would like the ability to increase directors’ fees on an annual basis if required and to have the head room to continue to do so to maintain competitiveness in the market.

The Board intends to increase the Directors’ fees, effective 1 January 2009 by 4.53%. This would result in an increase in remuneration of $1,850 (excluding superannuation) per annum for Directors and $3,701 (excluding superannuation) for the Chairman.

The second point that we’d ask to be corrected relates to the comment: “That report quoted the Chairmans remunerated for 2004 was $489,000 with the other 10 directors sharing $500,000 between them.”

The figure for the Chairman’s salary is incorrect. The current annual fees (set by directors in July 2004) are $40,850 (excluding superannuation) for Directors and $81,700 (excluding superannuation) for the Chairman.

We think it’s important to note that analysis undertaken by respected consultant Egan Associates, found that MLA’s Directors’ fees have not been adjusted over time to reflect market changes. The analysis noted that fee adjustments for Directors in companies of comparable scale would have increased in the order of 60 - 70% since the year 2000.

As a membership organisation, Directors devote a significant amount of time attending company and industry events. For example it is estimated that the time commitment required by the Chairman is a total of 225 days a year.

Damon Whittock,

Media Affairs Manager, Meat & Livestock Australia

Thanks for clarifying that Damon.

.

Over to you too have your say! You can enter an alias if you wish - though we’d prefer people to identify themselves (first name) for the sake of authenticity.

.

Got a tip off, article or have you seen a video or item you’d like to be seen by the Agmates Community? If so please email it to us at news@agmates.com

Brazilian owned global processing giant JBS trading as Swifts Australia is in the due diligence stage of buying the south Queensland beef exporter Kilcoy Pastoral Co and Western Australia’s only export beef plant Harvey Beef.

QLD farmer body AgForce is not happy about it.

Swifts became the largest meat processor in Australia in May of this year when it purchased the Tasman Group for $150m AUD. At the time Agmates wrote:

.

“Brazilian owned JBS is on the verge of being the largest beef processor on 3 major cattle producing continents. This is world domination of the export beef market on a grand scale never seen before.”

.

Swift Australia currently controls 21.45 percent of Australia’s red meat kill. The purchase of Kilcoy and Harvey who’s major share holder is the Singaporean Harmony Group would see Swifts control 25% of Australian beef exports.

If the sale goes ahead AgForce will consider lobbying the Australian Competition watch dog the ACCC to block the purchase on the grounds that Swifts in QLD will hold somewhere between 30-40% of the beef processing and export in Australia’s N01 cattle producing state.

What AgForce and the ACCC need to consider is that the Brazilian owned corporate giant JBS is not only the largest exporter of beef in Australia but also on the two major continents that are our export competitors, South America and North America (USA).

From Agmates article April 25th of this year.

.

“JBS is South America’s largest beef processor and one of the world’s largest exporters with 23 plants in Brazil and six in Argentina.

JBS is currently awaiting U.S. Department of Justice approval for acquisitions of U.S. beef processors National Beef Packing Co. and Smithfield Beef Group.

If approved, JBS-Swift, currently the third-largest U.S. beef processor in terms of slaughter capacity, would become the USA’s largest beef processor and control some 30 percent of its entire slaughter capacity.

That will mean JBS will be the largest beef processor on three continents - North America, South America and Australia”

.

JBS is still awaiting US federal government approval of the purchase which is meeting stiff competition from US cattle producers.

.

“R-CALF USA has now provided the U.S. Justice Department with five separate submissions, and has met personally with the agency to help it better understand how the U.S. cattle market functions and how the proposed merger would have a detrimental impact on the competitiveness of the entire U.S. cattle industry.“

.

Swifts Australia and others have argued that their market power is an asset to beef producers as they benefit from the global market reach of the company that employs more than 5,000 people world wide.

But workers at Australia’s largest processing plant Dinmore at Ispwich just west of Brisbane may differ with that opinion.

.

AUSTRALIA’S largest meat plant has added hundreds of foreign workers on visas while standing down Ipswich workers for nearly six weeks without wages.

.

Have your say!

Do you think that the Brazilian owned JBS Swifts should be allowed to further increase their market dominance here in Australia and indeed in the USA?

.

Got a tip off, article or have you seen a video or item you’d like to be seen by the Agmates Community? If so please email it to us at news@agmates.com

London’s conservative Mayor Boris Johnson has roasted IPCC cheif Dr Rjendra Pachauri over his campaigning for people worldwide to give up eating meat to save the world from Global Warming.

.

No, Dr Rajendra Pachauri, distinguished chairman of the panel, I am not going to have one meat-free day per week. No, I am not going to become a gradual vegetarian. In fact, the whole proposition is so irritating that I am almost minded to eat more meat in response.

Every weekend, rain or shine, I suggest that we flaunt our defiance of UN dietary recommendations with a series of vast Homeric barbecues.

We are going to have carnivorous festivals of chops and sausages and burgers and chitterlings and chine and offal, and the fat will run down our chins, and the dripping will blaze on the charcoal, and the smoky vapours will rise to the heavens.

We will call these meat feasts Pachauri days, in satirical homage to the tofu-chomping UN man who told the human race to go veggie.

.

Wow another politician who tells it like it is.

Way to go Boris and you have won todays Agmates “Onya” award.

Thumbs up and “Onya” Boris.

.

Click here to see a hilarious speech given by Boris. This guy is genuinely funny.

.

Have Your Say!

.