Archive for high prices

Where Do Livestock Producers Source Their Livestock?

May 18, 2010 at 5:17 pm · Filed under farming, high prices, livestock, Livestock issues, Online stock auctions, Online trading, rural australia, Rural business, rural issues, Stock agency, Uncategorized

The stock agency business is alive and well, but for how long? Elders is on the ropes, Landmark seems to be chugging along and Roberts is making money out of the rural and regional real estate businesses it has purchased. But what value is there in the livestock job?
Historically, agents will be paid for providing value to one party or the other. So, what value is provided by agents to livestock producers?
The accepted rationale has been that the agency business is based upon agents knowing who has stock to sell and who wants to buy it – and at what price. We all have stories of buying stock from a neighbour through an agent because we didn’t know it was available!
However, isn’t the reality that so many agents work their butts off to fill their ‘yards committments? If this is the case, then there wouldn’t seem to be a lot of work going-in to actually matching requirements to availability. Or perhaps there is.
In this age of emails and websites (to say nothing of the old fax-outs) providing information on available stock and buyer requirements, you’d think that agents would be able to source stock for their producer clients before it hit the ‘yards. Now there is also the availability of not only sourcing but also trading online e.g. There is the old CALM (AuctionsPlus) that attempts to emulate the ‘yards with its fall of the hammer system at a given time and now there is even a new online bidding system available at www.Saleyards.com.au where bids can be taken 24×7 on a success-only basis.
I guess this sort of thing must be happening as more and more ‘yards close their gates for a variety of reasons. Otherwise, how are buyers and sellers going to know the true market value of their hard-spent product that needs to generate an optimum return to pay-off the expenses incurred in production. Should they continue to accept agents advice on sourcing and pricing or let the market decide?

What do you think?
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The Elders Saga Rolls-On

May 18, 2010 at 4:51 pm · Filed under farming, high prices, livestock, meat industry, Online stock auctions, Online trading, rural australia, Rural business, rural issues, Stock agency, Stock Agents, Uncategorized

As we commented here a while ago, Elders is in trouble (Today’s share price just $1.115!). Like most agency businesses, they have a lot of fixed costs including high agent salaries, office rents, office staff, travel costs etc etc If it is true that their much touted restructure has in fact taken them back a step to an inefficient merchandise distribution process and their forestry and Hifert businesses are still nooses around their neck (see this Businessspectator comment), then what is the realistic future for this once great rural brand?
While the rest of the World is going online and rejigging their actual business operations to survive, (rurally this would mean more online selling of merchandise and livestock and less ‘yards and warehousing emphasis), perhaps Elders hasn’t seen itself clear to anything other than metaphorically shift the chairs on the Titanic.

What do you think?
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NLIS – Saviour Or Another Shocking Waste Of Money

February 5, 2010 at 1:12 pm · Filed under farming, high prices, livestock, Livestock issues, LPA, meat industry, NLIS, rural issues, tagging

Letter from beef producer

This view pretty well sums-up the perception of NLIS from many producers who believe they are funding a scheme flawed in theory and practice.

The National Livestock Identification Scheme more resembles a gauze jug than the failed Quarantine and Inspection Service and should immediately be abandoned in favour of the tail tag system.

Early 2004 I examined the Impact Statement and explained to Michael Beer, N.S.W. D.P.I. how and why it was completely undeliverable. For four years I have been providing details of this fiasco to State and Federal Polititions and their bureauracies. They too, seem to be unable and unwilling to comprehend the Scheme is simply nonsense based on fantasy, and will work wonderfully well so long as there is nothing like Equine Influenza.

Michael Beer recently reported in “The Land” that the subsidy to purchase scanners would discontinue, 794 producers had taken advantage of the offer. There are well over 70,000 Property Identification Codes in N.S.W. Before the Federal election, former Minister McGauran promised $15 million to fix N.L.I.S. which according to some “trumped up” exercise was almost perfect. When Labor won the election this money evaporated and nil allocation in latest budget. Hardly Government support, while producers are being slugged hundreds of million of dollars in compliance costs and wasted levy money.

I appreciate Tony Burke has more pressing problems than a Scheme with no purpose and no tangible results but hope he soon gets around to a serious inquiry into this fraud.

The database is a shambles and the credibility of M.L.A. is in tatters.

I am not so kind as my great little mate the Ooomanakker bird, who recently broke down and
wept, then prayed; “Father forgive them for they know not what they do”.

- John Niven (Producer) Bimbi

Do you agree?
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Maximising Livestock Prices In Australia

February 5, 2010 at 1:10 pm · Filed under farming, high prices, livestock, Livestock issues, meat industry, Online stock auctions, Online trading, rural australia, Rural business, rural issues, Stock agency, Stock Agents

Why is the sale of livestock so different from the sale of shares listed on the Australian Stock Exchange? e.g. for BHP, Comm Bank, NAB, Rio Tinto, etc ?

Wouldn’t it be niece (ideal?) to have 21 million potential purchasers (or more) eyeing your livestock off and bidding on its price.
Well, why doesn’t this happen? Can it happen? If so, how?

Currently, in a nutshell, shares are displayed for the World to see and their owners and agents (or stock brokers) go about marketing them to their clients.  They are then sold (by brokers in a competitive market) and their last price (and price history) is displayed for public consumption from anywhere in the World. Livestock on the other hand is a very disorganised marketplace – and as the analysts tell us, there is money in confusion.

A head of livestock is the pure embodiment of a ‘stock’ because what you see is what you get. You can know its breed and age, have it weighed, you can see its color and muscling, know the region it was grown in and its feed for the past 100 days, etc A share on the other hand is representative of the company in which it has ownership. While you can know a lot about a ‘share’ too, it has a lot more information underpinning it and its information is much more easily obtained or ‘transparent’ and there are so many more analysts crawling over its data and advising the market of its profile.

For livestock, there are:
Direct sales from the farmgate where the owner (producer/farmer) has to guess whether they are getting a fair deal, (i.e. How do they know the ‘true’ market price at the time of sale?)

Direct-to-Processor sales where producers transport stock to abbatoirs who kill and process them and then decide what the carcass is worth, paying the producer once that is done. (An interesting phenomenon to grow stock for 380 days and then have someone else decide what price its worth AFTER they cut it up!). This certainly doesn’t leave a lot of room for price control or negotiation. 

Physical saleyards is the other major sales method, where stock generally won’t come home at any price offered otherwise transport and fixed (non-success-based) selling costs are incurred. Frequently there are few competing buyers at saleyards. Stock here are at the mercy of event management. (And stock quality is poorer than on-farm sales, despite improvements in yards over the years).

Online selling is currently very old-fashioned emulating a physical saleyards and almost mandating agency intervention at inflated fees. However, at least it does enable stock from various regions to be placed on the one market and have buyers from anywhere compete for the purchase. It still has a way to go until it mirrors the ASX’s 24×7 abilities and agents competing for work if at all (like eBay), but stay-tuned this is not far away.

So, the really big defining difference between the two stock markets is that shares are displayed for the World to see their profiles and prices and to be bought and sold 24 hours a day, 365 days of the year and all buyers must operate through their listing market, be it new York, ASX, Newcastle, London or Dubai. Livestock on the other hand is a confused market where prices for the same animals can vary significantly on the same day in the same town!

Hold your hats, people! In a global World of cost-savings, more powerful online marketing and more savvy producers, this situation is going to change and change appreciably!

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The Great Meat Rip-off Much Is More Than High Fuel Costs

August 3, 2009 at 12:58 pm · Filed under farming, high prices, livestock, Livestock issues, meat industry, MLA, NLIS, rural australia, rural issues, supermarkets, Uncategorized

Agforce is right to advise consumers that they are headed for even higher costs if the fuel rebate is scrapped. Agforce on fuel costs
However, they are stuck between a rock and a hard place, aren’t they as we should be more focussed on the current rip-off by processors and retailers. Australia’s meat is purchased at the lowest cost in the developed World and sold at the highest! Click for the facts
While it’s all very well for MLA to advertise to increase consumption, I would prefer they work on removing the rip-off. It must be difficult for them though when they are representing both producers and the processors ripping them off!

What do you think?
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Is Our ‘Best Beef In The World’, Really The Worst In The World?

December 2, 2008 at 11:42 am · Filed under farming, high prices, livestock, Livestock issues, NLIS, rural australia, rural issues, tagging

Do you have an opinion on MLA telling the World that MSA and its QA ‘mates’ (Cattle care, Flock care, NLIS, LPA etc) are World best practice and the rest of the World needs to get on board?
Wouldn’t you think they should be focussed on Australia’s producers getting better prices and saving on costs rather than increasing processing and retail margins?
(Surely they wouldn’t be more interested in selling licences to these programs World-wide than looking after their levy-paying producers?)


Here is a list of  the weekly World beef price table from the Irish Farmers Journal (which some regard as ‘ one of the best in the World’) Sourced from John Carter’s article Nov 08 (see below).

In Euros the dressed weight prices were as follows
UK 3.56
Italy 3.46
Netherlands 3.35
Germany 3.30
France 3.19
Uruguay 2.51
US 2.46
Brazil 1.83
Australia 1.57
Argentina on 1.32 (which is politically price-capped)

“Why, when we are paying the highest levies and using the most expensive QA and trace-back systems in the World are we getting the lowest true prices in the developed world?”- John Carter. 

John also asks, “Is our ‘Best beef in the World’, really the worst in the developed world? Must we face the fact that we produce a third world product? Is it possible that we have been led by idiots who can’t see beyond their ivory tower?”
We are certainly being rorted by our supermarket duopoly — since 2000 when we moved from three to two supermarket chains, while the sale yard price of cattle has remained static, the combined retail/wholesale margin has exploded by 56%. Both producers and consumers are being ripped off. Producers now receive 28% of the consumer dollar and falling whilst the USA, UK and NZ receive between 45% and 49%.
Click here for more on this story

This has been happening on MLA’s watch, so what is their response ? How are they directly saving producers $money and increasing our prices?

Given that MLA is supposedly working in your best interests as a producer, have the programs they have introduced (MSA, NLIS, Breed plan, Cattle Care, Flock Care, LPA etc) assisted you?

What do you think?
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Australia’s Cattle Prices Fall As World’s Soar – Time For A Judicial Inquiry?

July 3, 2008 at 10:31 am · Filed under ACCC, farming, high prices, livestock, Livestock issues, meat industry, rural australia, rural issues

Without paraphrasing, I think the following call for a full judicial enquiry in to the Australian Beef Industry speaks for itself. (See it for yourself here)

ABA Chairman, Brad Bellinger said ‘US cattle prices are approaching record levels and their feeder steer is bringing over 40% more than its Australian equivalent. UK prices are at record levels and rising fast and Brazilian prices for forequarter beef have almost doubled since October’.

Australian prices have FALLEN 15% in the past year and we now have the lowest prices in the developed world. Australia is not suffering from oversupply, as we won’t go near filling the US beef quota. Brazil is shipping many times Australia’s tonnage into Russia, yet Australian cattlemen are being paid 15% less than they were a year ago.

Mr Bellinger continued, ‘We are paying almost five times the US producer levy to an unrepresentative and unaccountable MLA, plus we are paying hundreds of millions of dollars for a failed NLIS system that was meant to see us lead the world in market access and despite this, we are coming last’.

He said, ‘ABA research and our submission tendered to the ACCC Inquiry into Groceries have shown that the Australian supermarkets have by far the highest mark-up in the world, as they rort Australian consumers and producers.’

He continued, ‘I know that we live in the land of Ned Kelly and unregulated corporate price gouging is rampant but this time they have gone too far and are killing the ‘Goose that lays the Golden Egg’.

Australia is surviving on the sale of public infrastructure, the sale of businesses and our minerals; – when these run out, we will find we have destroyed our agricultural industry and end up with nothing; – similar to Nauru. Farms are up for sale Australia wide, while the MLA and the Government have failed us badly.

‘Considering the above facts, we call on Minister Burke to establish a Royal Commission into the Meat Industry,’ stated Mr Bellinger. ENDS

For more information please contact Brad Bellinger on 02 6725 4282 Mob 0401 233 421
Linda Hewitt 07 4987 6794 Mob 041 978 9211

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Does Meat Advertising By MLA Add Value To The Producer Or The Retailer?

December 13, 2007 at 2:59 pm · Filed under Blogroll, farming, high prices, livestock, Livestock issues, MLA, rural australia, rural issues, supermarkets, Uncategorized ·Tagged , , , , ,

Did you know that a bloke called David Thomasen, “…sits at the helm of a $16 billion business whose marketing successes have a positive effect on the turnover of two of Australia’s top companies, Woolworths and Coles?”  click for the article on MLA advertising. No, he’s not the CEO of the World’s largest farming conglomerate, he’s the MLA’s (Meat & Livestock Australia) advertising man! And he’s in charge of an advertising budget – a far cry from being at the ‘Helm’, wouldn’t you say! In response to his claim, not only does meat advertising have a positive effect on the turnover of these two virtual monopolists, but it also enables to them to continue to fleece Australia’s farmers! How else could farm gate prices decrease when retail prices increase?
*IF* MLA’s advertising has been so good over so many years, where’s the measurable effect on the producer’s bottom line?! Any decent marketer knows that it’s one thing to generate sales, it’s another to manage earnings and MLA needs to be brought to account for the earnings of its funding producers!)What do you think? Please leave a comment below

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Is The Bush Politically Mature?

October 29, 2007 at 11:29 am · Filed under Blogroll, election, farming, high prices, livestock, Livestock issues, NLIS, rural australia, rural issues

Should The Bush just vote back the people it has supported forever i.e. The Vailles, Andersons, McGaurans and Heffernans? In the cities, because there are a significant number of voters who swing between the traditional political battle of Labor and Liberal, most electioneering is spent trying to woo them.Wouldn’t it make sense then if The Bush caught on to this and made the parties treat them more seriously as well? And this would then give The Bush more respect from the cities as Bush voters could then participate more in some broader issues rather than the ones that just affect their own hip pockets. e.g. While the media loves painting The Bush as rednecks, most of us have some sensible opinions on the War in Iraq, Free tertiary education, Social payments for those in need, Health costs,  Humanitarian assistance for refugees, Inflationary pressures and interest rates, etc. By always just throwing our lot in with what seem to be issues that just affect our own lives and seemingly not voting for broader, selfless issues, we are an easy media target and an even easier target for professional organisers who move from farmers group to semi-government bodies to state or federal politics – and we all know a swag of them!  And by mindlessly supporting the same party each time despite what we may think abot their handling of major isssues, we have personally ended-up with the costly NLIS, LPA, FMD risk, HECs fees for education that used to be free, service-based health that disadvantages rural areas, etc. Perhaps if we showed a little more flexibility and more Worldy appreciation for how politics is actually run, not only might our opinions be listened to at election time but perhaps we might also achieve a bit more from whichever mob ends-up in power.

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Are Horse-Flue & Foot and Mouth Disease Related?

September 13, 2007 at 4:47 pm · Filed under farming, high prices, livestock, NLIS, rural australia, rural issues, supermarkets, Uncategorized

These diseases may differ medically, but to AQIS and the Government they should be treated no differently.
We have hundreds of horses ‘down’ with this disasterous flu but still while Rome is burning Nero fiddles on. i.e. Minister McGauran has agreed to let foot and mouth disease at risk meat into Australia from the US.Isn’t this a classic case of letting the horse bolt and then trying to re-stable it?!You’d reckon McGauran et al, including AQIS, would want to learn as quickly as possible and shore-up our defences to prevent this sort of thing happening again to our precious livestock. And you’d think they’d be even more vigilant when it comes to our massive meat livestock market. We are 2nd only to Brazil in beef exports but are allowing meat at risk of foot and mouth into Australia from the US and Brazil. It will be a sad day if (when?) some exotic disease devestates our meat industry because some poilticians wanted to “Go All The Way With LBJ”!
What do you think?
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