Australian Agriculture minister Tony Burke and Trade Minister Simon Crean have taken great pride in announcing the following Free Trade initiatives this week.

• Thrown open the doors to a flood of cheap imports from the 10 ASEAN nations. this will see hordes of low cost, low regulated produce and fruit replace Australian produce on Supermarket shelves.

• Thrown open the doors to Chicken imports from anywhere in the worlds.

• Thrown open the doors to low cost and low regulation banana imports from the Philippines.

We saw the Coalition do the same with our pork producers some years ago. Today most pork on supermarket shelves is from heavily subsidized producers in the USA and Denmark. The result is that 40% of our pork producers have left the industry in the last 18 months.

How long will it be before we open our doors to low cost beef from South America?

Can’t happen I hear you say. Why not I ask? After all our major beef processor is the Brazilian owned JBS-Swifts. They are also the largest Beef processor in South America.

Each of our agriculture industries is being picked off one by one by the Free Traders. Soon there will only be the beef and lamb industries left untouched.

Ask yourself – how long?

After all that’s what free trade is all about.

Have your say!

Meat & Livestock Australia (MLA) released figures yesterday that Australia had exported a record tonnage for 2008 .

Exports for the past calendar year reached 957,479 tonne swt – up 2% from 2007 (941,400 tonnes swt) and surpassing the previous record high of 953,932 tonnes swt set in 2006 (Department of Agriculture, Fisheries and Forestry – DAFF)

The jump in shipments commenced in April, with increased supplies (after a low March quarter) and surge in demand from Russia.

The 30-40% decline in the A$ over the second half of the year proved to be a mixed blessing. It reduced the relative prices of Australian beef to key export markets but, together with the global financial crisis and deteriorating economic conditions, also disrupted trade.

Japan easily maintained its place as Australia’s largest beef export market in 2008, with exports falling 4% year-on-year, to 364,302 tonnes swt. Whilst exports for 2008 remained 10% below the record volume of 405,794 tonnes swt in 2006, it was still a very strong result given the low grainfed beef supply, higher A$ during the first half of the year and increased competition from the US later in the year.

Given the significant decline in the number of cattle on feed in Australia during 2008, grainfed shipments to Japan for 2008 declined 13% year-on-year, to 149,183 tonnes swt, making up 41% of total shipments – the lowest grainfed percentage since 2003.

Exports to the US for 2008 totalled 234,779 tonnes swt, down 23% year-on-year and the lowest level since 1997.

Exports to the US were very sluggish for the first nine-months of the year, falling 34% year-on-year, influenced by a stronger A$ and increased exports to Russia. However, the final three months of the year saw a sharp turnaround in exports to the US, as the fall in the A$ assisted a 23% jump in exports.

Increased competition from US beef in Korea during the second half of 2008 contributed to a 15% decline in Australian exports for the calendar year, to 127,207 tonnes swt. Australian beef and veal exports to Taiwan also declined 7% year-on-year, to 27,098 tonnes swt.

2008 saw Russia emerge as Australia’s fourth largest beef market, with the Commonwealth of Independent States (CIS – almost all to Russia), taking a record 72,035 tonnes swt. This was despite shipments almost ceasing over the final few months of 2008, due to payment and credit issues stemming from the global financial crisis.

A sharp fall in competition from Brazil was largely behind the surge in demand from Russia, South East Asia and the European Union in 2008. Shipments to Indonesia (33,019 tonnes swt), the Philippines (14,143 tonnes swt), Singapore (8,061 tonnes swt) and Malaysia (6,183 tonnes swt) increased 23%, 314%, 46% and 87%, respectively. Similarly, exports to European Union doubled in 2008, to a record 11,863 tonnes swt.

Source MLA.

Have Your Say!

Canadia’s Food Inspection Agency (CFIA) has confirmed it had found it’s 16th case of Mad Cow Disease (bovine spongiform encephalopathy or BSE) in a 7-year-old dairy cow from British Columbia.

The Meating Place web site said (no link – subscribers only):

Canada remains a Controlled Risk country for BSE, as determined by OIE, and so this announcement should not affect exports of cattle or beef from the country.

According to OIE, Canada has had 16 native-born cases of BSE: two in 2003, one each in 2004 and 2005, five cases in 2006, three in 2007 and four so far in 2008. Canada also had an imported case of BSE in 1993.

The agency reported that no part of the cow had entered the food chain.

Have Your say!

If the Australian Dollar had not crashed from 98 cents US a couple of months ago to 65 cents US now there would be carnage in Australia’s rural sector.

The monthly Westpac – NFF commodity price index figures are just out for October. The index is 2.6% below this time last year but would have been a whole lot worse if not for the slump in the Aussie dollar.

Beef Prices were one commodity to really benefit from the falling dollar.

Here is the index movements for last month. You’ll see that they are all over the place.

Commodities hit by falls were canola and barley (both minus 9.2%), wool (minus 8%), wheat (minus 5.9%) and cotton (down 1.8%). These falls outweighed major price rises for dairy (7.6%), sugar (4.1%) and beef (3.3%).

Quoted in the Age Newspaper senior agribusiness economist at Westpac Andrew Hanlan said:

The financial crisis had undermined pricing fundamentals. “The weakening Australian dollar prevented what could have been an extreme month for global agricultural commodities,” he said

Have Your say!

In what is tremendous news for the Australian Cattle Industry North Queensland Cattleman Greg Brown has been elected president of Australia’s peak beef industry body, Cattle Council of Australia.

Photo Thanks to Lisa Yorkston AgForce: Left to right – George Bloomfield, Atherton, ( Now Cattle Council of Australia President) Greg Brown “Meadowbank” Mt Garnet and Stephen Batt “Jucani Park” Upper Barron in the paddock on George’s property on the Kennedy Highway during a beef tour in 2006.

Agmates is very excited about the appointment. Greg is a down to earth producer who has a good handle on the Australian cattle industry as a whole. He is easy to talk too, very practical and straight forward in his thoughts and views on the industry.

I could not personally think of a better man to represent beef producers at the highest levels of policy development. There’s a whole lot of beef in Greg and very little Bullshit.

In my dealings with Greg, I’ve only ever found him to one of those rare individuals who is not only a successful beef producer, but is also prepared to devote his scarce spare time and abundant energy into making it a better industry for all.

Greg has worked tirelessly as Cattle President of AgForce and he has Agmates full support in his continuing efforts to securing a profitable and sustainable beef industry for all Australian beef producers.

Have Your say!

I have been probing the peak bodies for possible ramifications of the global credit crisis on our farmers for days. I just knew there had to be some, but I couldn’t find it till now.

Got this tip off by email this morning -

“Rumour has it that meat is being returned from Russia in large tonnages as the credit crises has hit them and they cannot pay for their beef.

I haven’t heard it from an official source”

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I can confirm that the information is “dead right”. I have spoken to senior figures in the industry who have asked not to be named who say the information is correct.

It involves all processor who have meat on the water to Russia. None of them are giving anything away. They are claiming the information is “commercial in confidence”.

I will update this entry as more information comes to hand.

Update: 3pm -

I have contacted both the Federal Ag Minister Tony Burkes Office and Trade Minister Simon Creans Office and both have said they will get back to us.

Update: 3.55pm -

Was given a tip off that kilcoy Pastoral has an employee in Russia at the minute. Spoke to Kilcoy CEO Tony Munns. Tony confirmed our information and said:

“Our product is going into Russia and we have no problems. Our product is being well received and infact we are currently in the process of negotiation our next product shipment. It is business as usual for the trade between Kilcoy Pastoral Co and our Russian customers.”

Thanks Tony.

That debunks the information that I was given this morning that this involves all Processors that have meat on the water to Russia. Obviously KPC has no problems.

Lets just hope this whole thing is just one of those crazy rumours that do the rounds in times of great uncertainty. We are working hard to get to the actual truth of the matter for the Agmates community.

If anybody knows or hears anything please email me at news@agmates.com or call 0428 966819. In confidence of course.

Beef consumption per head of population in Australia has not changed since 1960. Ross Garnaut and others fanciful suggestion that Australians should shift from eating beef and lamb to Kangaroo would entail a massive re – education program of consumers and or incredibly cheap retail prices.

The below graphs sourced from ABARE show that the retail price is an all important factor in what meat familes buy and consume.

You can see from the graph that retail beef prices in 2006 were just above those of 46 years previous. Poultry on the other hand was just 20% of its 1960 equivalent. Note the big beef price drop during the beef crash of the 1970’s.

Now for the Consumption per capita (person) for the same period.

Things we can learn from the two graphs.

1. Note the only time that beef consumption has risen during the 46 year period was during the 1970’s cattle crash. Except for this period beef consumption been flat lining for the last four and a half decades. This is despite Meat and Livestock Australia spending millions of dollars of producers levy money on domestic promotion over the last decade.

2. Sky rocketing consumption of Poultry (900% increase) is in direct relation to the plummeting retail price.

From the two graphs it would appear that if Roo meat was to retail at about the same price as Poutry, Australian consumption would automatically dramatically increase.

There is the conundrum. If Roo meat has to be sold at those sort of prices, how do producers make any money from the enterprise? Currently beef producers receive about $2.50 – $3.50 a kilo carcass price for beef. Roo carcass price is approximately 0.70 cents – 0.90 cents a kilo carcass weight.

There are about 3 million Roo’s killed each year for consumption. Of the 3 million 30% go to pet food and 70% to human consumption. Of that 70% – 30% is sold domestically and 70% is exported, with the largest market Russia. The Russians cheifly use it as a beef substitute filler in cheaper sausage meats.

Senator Ron Boswell touches on why producing cheap Roo meat is an impractical dream.

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Have Your say!

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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 …”

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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.

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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

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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.

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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.

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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.

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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.

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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?

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

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Update @ 5pm today. -

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

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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.

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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.

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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

Explosive new research has shown Australian Beef producers will be slugged $450 million dollars a year on slaughter cattle as the result of the emissions trading scheme.

Senator Ron Boswell raised the issue in the Senate this morning quoting extensively from a submission done by Rockdale Beef Pty Ltd.

Rockdale Beef is owned by Itoham Foods Inc. and Mitsubishi Corporation and operates an integrated beef cattle feedlot, feed mill, meatworks and farming business at Yanko in Southern New South Wales.

Rockdale kills up to 170,000 cattle per year and have longstanding export supply relationships with 12 key countries around the world including Japan.

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Rockdale Beefs General Manager Paul Troja [ pictured above ] told Agmates today:

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“What Senator Boswell quoted in the Senate is correct in the sense that the permits we’d have to purchase to cover the cattle we put through the works will equate to $33.60 per head. What Senator Boswell did not quote was that our increased energy input costs from the ETs will equate to another $17 per head on top of that.

That equates to $50 per head. Nearly all of our product is exported. We have no ability to recover those extra costs from our customers at the other end. To survive we will have to pass those costs back to our cattle producers.

Every beef processor in the country is in exactly the same boat. There are approximately 9 million cattle slaughtered in Australia each year. This emissions Trading Scheme will be a $450m indirect tax on Australian beef producers each and every year.

Those costs to producers are unavoidable. We are looking at any way we can to reduce our carbon footprint, but we are dealing with cattle and practically there is no way to offset that.

We will have to look to source many of our materials such as packaging etc overseas where the manufacturers do not have an added cost of a ‘carbon tax’ in their manufacturing process.

If we were to purchase those materials ‘made in Australia’ we would also have to build those additional costs into our calculations and add that to the $50 per head taken off the price paid to cattle producers.”

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The $450 million dollars a year cost to Australian beef producers is in addition to the costs they will bear through their own farm inputs. Those additional costs will be highest on power, fuel and fertilizer but will also be included in everything that is manufactured in Australia and used on a farm.

These figures show that Farming has to be excluded completely from the ETS or we will simply have no farmers.

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Have Your Say!

I honestly do not believe that the majority of farmers are aware of the enormous costs the Emissions Trading Scheme will levy on them. ABARE indeed has forecast they could reduce farm profits by 100%. What do you think?

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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