THE VICTORIAN Farmers Federation (VFF) has called for an independent body to monitor livestock sale prices to help improve price transparency and accountability in Australia’s red meat processing sector.
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The VFF made the call at this week’s hearings of the Senate Inquiry into the effect of market consolidation on the red meat processing sector.
The VFF had lobbied for a review following a processor boycott at a northern Victorian saleyard earlier this year and fears that price competition would decline following the takeover of Primo Smallgoods by Brazilian meat processor JBS.
VFF livestock manager David Picker said an independent body was needed to overcome the “issue with trust” between meat producers and processors.
Mr Picker said the proposed independent body would initially act as an information hub monitoring prices from livestock sales such as through saleyards or direct selling to discover the “true market price.”
But Mr Picker said most of mistrust between producers and processors was due to the need for more transparency about how much money processors derived from livestock after it was processed.
Producers wanted more information about how much product their livestock yielded, about “what the hot carcase weight was compared to the live weight,” Mr Picker said.
That information from processors was very useful to producers for their decisions about the genetics of the livestock they produced, forage management and marketing decisions, he said.
VFF livestock president Ian Feldtmann said that “when processors recovered at least 22 per cent of the price they pay for cattle just by selling waste/by products, you start wondering about their profit margins.
“Suddenly the gap between beef retail prices and cattle sale yard prices has begun to take on a new meaning,” Mr Feldtmann said.
Mr Picker said the boycott by processors earlier this year of the Barnawartha saleyards in northern Victoria showed “there is no level playing field in the Victorian livestock markets.”
But the VFF said enhancing competition law along the lines of those proposed by the Harper Inquiry would not solve the problems confronting livestock producers.
Subjecting producers to expensive and prolonged competition law actions in courts would be unsustainable and counterproductive for all participants in the industry, the farmers’ body said.
Instead all industry participants should get together to initiate structural change in the livestock and red meat markets, the VFF said.
