Pricing fear prompts beef transparency changes
The Cattle Council of Australia (CCA) has called on MLA to devise a reporting system to record key pricing data on the cut-out value of boxed beef sold domestically and abroad. This is over long-running concerns that Australia’s beef industry needs to improve transparency of red meat pricing to make the wider beef industry more competitive.
The CCA request was submitted after MLA posted a white paper on improving beef price transparency throughout the supply chain on Wednesday 25 May. It concluded that the biggest gap in price transparency in the beef supply chain was at the wholesale and export stage.
To improve this, the MLA report made two suggestions for improving transparency: it questioned if government intervention was necessary to implement a mandatory price reporting system, or whether the industry could effectively adopt a voluntary system to report pricing.
Dated information
The ACC duly asked MLA to develop a system without government involvement.
“Further steps are required in Australia to provide confidence in pricing systems – simply collecting more cattle and beef prices will not result in the price transparency issue going away,” said the CCA’s supply chain integrity chairman Peter Hall.
Currently, data available for wholesale meat prices in Australia, which meat producers rely on, is normally one to three months out of date by the time producers receive it, according to the CCA.
“The industry needs to develop a mechanism whereby MLA can access that trade information and use it to develop an averaging system across Australia,” said Hall.
The MLA has since revamped its over-the-hook (OTH) indicator reports to make it easier for beef producers to interpret price differences between weights and livestock categories.
A major probe into competition, efficiency and transparency in Australia’s beef industry is also being undertaken by the Australian Competition and Consumer Commission (ACCC). This stems from a 2014 Australian Senate inquiry into the structures that control levies on grass-fed cattle. One of seven recommendations made by Senate was for the CCA and MLA to analyse options for boosting price transparency.
