Cattle producers tell Senate Inquiry prices received are lowest in 30 years but consumers paying more
A Senate inquiry has confirmed what grass-fed beef producers have complained about for a long time; that they pay the majority of the levies in the meat industry, but receive a fraction back in targeted research.
All cattle producers are upset at the record low prices, at a time when the country is seeing record exports.
The Senate inquiry has heard that meat processors pay 15 per cent of the levies, but receive double that in project spending,
Halfway through the morning’s hearing in Canberra, the chair of this Senate inquiry into grass fed beef levies, WA Labor Senator Glenn Sterle, showed his sympathy for cattle graziers.
"It seems everybody is making money (from beef) except the poor bugger on the land."
The cattle levy is collected as a $5 transaction fee per head sold.
It’s managed by Meat and Livestock Australia, and spent on marketing and research.
The Senate Committee heard that grass-fed producers are paying the sheer bulk of those cattle levies, $54 million, while grain-fed producers pay just $8 million.
Senators said grass-fed producers are receiving just one sixth of that money back in dedicated research, and that those producers wanted greater transparency from Meat and Livestock in how it was spent.
The Federal Department of Agriculture responded by saying transparency was an issue with MLA as well.
"It’s not just growers saying that, it’s MLA as well. Its own review (in 2010) report said they needed to improve transparency and consultation. It’s an issue when you’ve got an industry that large."
Quite a bit of debate during the Senate hearing centred on the amount of levies collected by the Meat Processing Corporation (AMPC) from companies, and spent on marketing and research.
David Lind, of the AMPC, conceded under questioning that it collected from processors in the order of $17 million, and spent $30 million on projects.
Liberal Senator Chris Back said it looked like "the meat processing sector then gets back in expenditure about double what you actually contribute by way of levies, is that a fair assumption?"
"Yes," Mr Lind said.
Returns to growers
The Australian Beef Association says in its submission that cattle prices are their lowest in 30 years, but shoppers are paying more.
Senators put it to David Lind, of the Meat Processors Corporation, that processors are riding on the coat tails of producers.
"The producer sector is integral to our businesses. Without a viable producer sector, we don’t have a business, and our membership certainly acknowledges that," said Mr Lind.
"We go through cycles of supply and demand and it’s unfortunate that those cycles result in different profitability for one sector over another."
During his evidence, Dr Peter Barnard, of Meat and Livestock Australia, defended the meat processors, saying their costs were much higher than US firms.
"The costs of slaughtering in Australia are double, in fact slightly more than double, than in the US."
In Australia, it costs $300 per head to slaughter, compared to $150 in the US, and US producers have the largest meat market in the world at their doors, so don’t have to pay shipping.
As well, he says, energy costs in the US are significant less; electricity and diesel costs are much lower.
"In Australia, you pay $1.50 per litre for diesel, but in the US it’s about $1 per litre.
Dr Barnard also pointed to higher labour costs in Australian abattoirs. For example, a good boner with overheads costs $45 per hour while in America they’re paid $20 per hour.
He said grass-fed producers help set the priorities for the research projects, and MLA was trying to improve grower input into that process.
He said grassfed producers help set the priorities for the research projects, and said it is trying to improve grower input into that process.
Dr Barnard refuted suggestions that grass fed producers only received a small fraction in dedicated research projects.
"I don’t necessarily agree with that. We go through a range of consultation processes, through grass roots groups including regional beef research committees, the Northern and Southern Beef/Meat Research Councils."
But he took a question on notice, the breakdown of where research projects focussed on problems in grass fed beef production.
The Senate inquiry into how beef levies are collected and spent will hold hearings in Broome (WA), Katherine (NT), Rockhampton (Qld) and Albury (NSW) during May.