Saturday, August 7, 2010

BEEF'S NEW DIRECTION STRATEGIC PLAN

The Beef's New Direction Strategic Plan was launched at the Rockhampton Beef Industry Forum on Friday 16th July.

The Plan adopts four broad strategies to address the key challenges facing the Australian beef industry:

  • Strategy 1 - Increase Real Cattle Prices
  • Strategy 2 - Reduce Beef Industry Costs
  • Strategy 3 - Industry Organisational Restructure
  • Strategy 4- Decentraliasation
The Plan identifies:
  • A potential whole of domestic beef industry payout of over $1 billion a year through the introduction of a national beef grading system;
  • Improved beef marketing programs;
  • Improved accountability and efficiency of industry bodies;
  • Decentralisation incentives to address the declining and aging rural population, and improve services and infrastructure in rural and regional areas.
A copy of the Plan can be viewed or printed HERE.


BACKGROUND

The Strategic Plan was prepared by Hunt Partners for the Beef’s New Direction Task Force, a beef industry think tank that was established following a forum of producers held in Armidale, NSW in February this year.

At that forum over 1,200 beef producers from Victoria, South Australia, Tasmania, Queensland and New South Wales expressed their anger at the decision to allow beef imports into Australia from BSE affected countries and their dissatisfaction with the current industry organisational and consultative structure and the declining profitability of the industry.

The forum expressed particular concern about the sharp decline in cattle prices and domestic consumption over the past 10 years, which industry bodies such as RMAC and MLA have failed to address despite having received billions of dollars in producer levies.

The Strategic Plan was endorsed at a follow-up producer forum at Paradise Lagoons in Rockhampton on 16th July by over 500 cattle producers who collectively own over 1.25 million head of cattle out of a national herd of around 24 million.

Producers are calling for relief from industry costs and levies which have increased significantly in recent years. The 2001 Heilbron Report into the impact of government on red meat industry competitiveness, commissioned by MLA, found that Australian producers paid about 33% of their revenue in government influenced costs and charges whilst US producers paid around 12.5%.

The report concluded that the failure to reverse the increase in government costs and charges must inevitably contribute to the long-term decline of Australia’s livestock industries.

Government influenced costs and charges have continued to increase since 2001 and beef producers now pay 8 times more in levies than their US competitors.

At the same time agricultural exporters have had to deal with the consequences of an unprecedented resources boom which has driven the value of the Australian dollar from 50.5 cents USD to 88 cents USD which means Australian agricultural exporters are receiving significantly less for their product than they were in 2001.

The Australian beef industry can not survive the double impact of uncompetitively high government charges and a high Australian dollar which is driving down the revenue they receive for their exports.

This industry needs State and Federal governments to develop a long term strategy to ensure the survival of its rural export industries during this unprecedented resources boom.

The Strategic Plan provides concrete strategies to address the issues which producers identified as presenting the greatest challenges to their businesses and communities.

A copy of the Plan can be viewed or printed HERE.

The resolutions adopted by 500 beef producers at the Rockhampton Forum can be viewed HERE.

For all information on the Rockdale Forum see: http://www.beefforum.com.au/

Friday, August 6, 2010

NSW BEEF LABELLING LEGISLATION TO COMMENCE 31 AUGUST 2010

The NSW Minister for Primary Industries has advised that the long-awaited Torbay “Truth in Labelling” legislation (the Food Amendment (Beef Labelling) Act 2009 (NSW)) will come into effect on 31 August 2010.

The Minister proposes to adopt the latest edition of the AUS-MEAT Domestic Retail Beef Register as the reference document for that legislation.

The AUS-MEAT Domestic Retail Beef Register provides retailers with alternative descriptors to the current trade AUS-MEAT language for retailers.

Consequently, after August 31, retailers in NSW will be required to describe beef from animals:

  • up to 18 months who have yet to cut any teeth as “Yearling” or simply “Beef”;
  • with 2 teeth as “Young” or “Beef”;
  • with 4 teeth as “Intermediate” or “Beef”;
  • with 6 teeth as “Mature” or “Beef”;
  • with 8 teeth (the better cow beef) as “Economy”;
  • with 8 teeth (the worst cow beef) as “Manufacturing suitable for mince only”.

There are many good provisions in the Food Amendment (Beef Labelling) Act 2009.

Unfortunately, the decision to enable NSW retailers to label old cow beef from mature animals with 8 teeth “Economy” rather than “Budget” and beef from immature 6 teeth animals as “Mature” is not one of them.

MLA research shows that consumers think that beef labelled “Economy” would represent value and would be better to eat than beef labelled “Budget” and that beef labelled “Mature” would be chewy and probably came from an old cow.

The two terms should have been reversed, with the old cow beef being labelled “Mature”.

We understand that Richard Torbay requested Minister Whan to ask the industry to amend the AUS-MEAT Domestic Retail Beef Register to require the best of the cow beef from 8 tooth animals to be labelled “Mature” and the beef from younger 6 tooth animals to be labelled “Economy”.

Minister Whan was, however, unable to obtain industry’s agreement to this request, and those that profit from the selling of old cow beef to unsuspecting consumers carried the day.

The balance of the provisions are, however, to be applauded.

For over twenty (20) years, export abattoirs have been required to label the beef that leaves their abattoir in accord with AUS-MEAT language.

Australian retailers, however, have had no such requirement. Consequently, beef from six (6) tooth animals described by the abattoir as PR is regularly sold by retailers as “Yearling”.

Provided that proper audit and enforcement provisions are put in place, this legislation will bring these practices to an end.

Currently, export abattoirs are required by the AUS-MEAT language to label the worst of the cow beef “Manufacturing”, but the retailers who are signatories to the voluntary Budget Beef Retail Agreement have no such requirement. Consequently, beef delivered to the back of the store in boxes marked “Manufacturing” is sold by those retailers as “Budget” beef.

Once the Food Amendment (Beef Labelling) Act 2009 is proclaimed, retailers will be required to label Manufacturing beef “Manufacturing – Suitable for Mince Only”.

The latest edition of the Domestic Retail Beef Register will also bring to an end the misleading retail practice of advertising beef as “Export A”, “Export Quality”, etc.

Richard Torbay, the State Member for New England and Speaker of the NSW Legislative Assembly, is to be congratulated for his vision and persistence in bringing the long overdue reforms to NSW Beef Truth and Labelling to fruition.

MLA FUNDAMENTALLY WRONG ABOUT BEEF’S BIGGEST MARKET

David Palmer, CEO of MLA, has been quoted in the Sydney Morning Herald (Wednesday 4th August) as saying:

“We know that Australians eat roughly 100kg of meat each year…its finite…it is about how we divide that.”

Australia’s per capita meat consumption is in fact far in excess of 100 kg. The recent annual totals are as follows:

2006: 115 kg
2007: 117.5 kg
2008: 110.8 kg
(ABARE)

The present average of 114 kg represents an 8kg increase in consumption since 1990, when Australians ate only 106 kg.

It is a concern that the CEO of MLA has the mistaken belief that the total meat consumption in Australia is finite and if consumption of one type of meat, eg poultry, goes up the consumption of the other meat products must fall by an equivalent amount.

This has not been the case in Australia nor in the United States, where beef consumption has generally held up, despite similar increases in chicken consumption over the last 15 or 20 years, at a total of 125 kg per person.

MLA's failure to understand that the total "meat consumption pie" can increase will affect the marketing and promotional decisions they make. Such basic misconceptions are no doubt contributing to the failure of the MLA do address the long term decline in Australian per capita beef consumption.

Mr Palmer also appears to be treading on egg shells in his comments in the SMH because he is fearful that the new beef promotion campaign may affect lamb meat sales.

This bares out the concerns raised in the Beef Industry Strategic Plan, produced by Hunt Partners for the Beef’s New Direction Task Force, which concludes that there should be separate sheep and beef corporations because essentially lamb and beef are competing products.

Read the SMH article HERE.