FORGET good seasons, new markets, growing demand or food security issues – it won't mean a thing unless the decline in real returns to cattle producers is quickly turned around.
That message will underpin a new campaign by Inverell processor and long-time industry agitator, John "JR" McDonald, of Bindaree Beef, who is making it his mission in 2010 to educate farmers about what they're actually getting paid – more than 20 per cent less than 20 years ago in real terms – and why this is unsustainable.
Mr McDonald and his family will kick off that campaign with a big beef industry forum in Armidale next month, calling for transparency in the fees and charges being collected by government and industry bodies and benchmarks to help address this decline and get Australian producers on a more equal footing with international competitors.
The campaign is being watched with caution at Meat and Livestock Australia, whose boss, David Palmer, agrees cattle prices are "frightful" but says this is largely a result of currency woes, variable seasons and economic slumps in major markets like Japan – all of which are largely out of the producers' control.
He says productivity has and will remain the key to staying on top of what have been near unchanged prices in real terms since the 1950s.
But Mr McDonald believes the figures on the decline in returns should trigger a major refocus.
Most alarming he says is the fact weighted average saleyard prices for cattle in 2008/2009 were 21.6 per cent lower than 1988/89 figures and 27.2 per cent lower than 1983/84 returns, according to data compiled by the Australian Bureau of Resource Economics (ABARE) late last year.
In today's terms, the 2008-09 weighted average saleyard price for cattle was 300.53 cents a kilogram – in 1988/89 the price was 383.47c/kg.
The fall in domestic consumption of beef over the years is just as frightening, he said.
In 1989 each Australian ate 43.2kg of beef each year, and in 1998, when the Meat Standards Australia grading system was launched to reverse falling per capita beef consumption, each Australian ate 38kg of beef.
The MLA forecast for 2009 is that each Australian would eat 31.3kg of beef.
This is despite almost $10 a head in industry and government fees and charges collected at the point of slaughter, much of which go towards research, development and marketing, he said.
American farmers pay the equivalent of $1 a head.
"Our industry is close to crisis point," Mr McDonald said.
"The costs faced by our farmers and industry compared to our overseas competitors is unsustainable.
"Cattle prices are in dramatic decline and our farmers will go out of business.
"We are going to have to change all this, we need a new plan, even some new leadership, to turn this very serious situation around."
Mr McDonald said there were so many costs involved in with producing cattle today, many of which he says are unsustainable and need to be overhauled, and the level of duplication among the large number of peak industry bodies was also costing too much money.
The forum in Armidale on February 27 will call for complete disclosure of where all the money collected at slaughter is actually going, for what purposes, and whether the expenditure is working.
He said the industry must work on boosting its domestic markets so it was not so exposed to fluctuations in the Australian dollar.
Meat and Livestock Australia managing director, David Palmer, said McDonald was correct that "prices are frightful".
"You don't have to go to the meeting at Armidale to know that prices are crook," Mr Palmer said.
"They are terrible, and it's been well and widely documented as to why they are.
"Currency, the variable seasons, the global crisis – we've got Japan who is an enormous customer for Australian beef is in the most terrible doldrums.
"We're in a cash-strapped environment and it's having a huge impact on beef and other commodities."
Mr Palmer, who will attend the meeting, said the real price of cattle had not altered much since 1950.
"There was a gyration in the 70s and 80s, but these prices in real terms have narrowly traded in a fifty cent band since 1950," Mr Palmer said.
"The correcting element, which has given sustainability to the industry, has been productivity improvement.
"Australian agriculture since 1953 has trebled in productivity and the Australian beef industry has to achieve 2 per cent per annum in productivity improvement just to stay still."
* For information on the forum go to www.bindareebeef.com.au or phone (02) 6721 1411.
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