Red meat industry productivity relies on reliable information

Transparency in the food sector has become crucial in recent years, influencing not only consumer choices but also investment confidence. The Australian Competition and Consumer Commission (ACCC) Commissioner Mick Keogh said reliable information is important in encouraging future investment and ensuring the productivity of the red meat industry, but there is still much to be done before this is achieved.

“The future growth and profitability of the red meat sector in Australia will be dependent on the investment confidence of sector participants, which will in turn be facilitated by the fairness and transparency of markets, and the quality of information flows up and down the value chain,” Keogh told the MLA Red Meat Industry Forum.

According to Keogh, recent events in the cattle industry meant that even basic market information such as weekly slaughter numbers were unavailable for a period, which raised concerns about the transparency and future competitiveness of the cattle industry.

In March 2017, the ACCC released its cattle and beef market study which suggested improving the availability and comprehensiveness of market information and data from objective carcase measurements. The ACCC plans to follow up on this in 2018.

“The decision by some to reduce, rather than improve, market reporting was short-sighted, and could be detrimental to confidence along the entire value chain. This will be a focus of our review of progress on the ACCC beef and cattle market study recommendations that we will conduct early next year,” said Keogh.

He also emphasised the importance of information and data in achieving the productivity growth Australian producers needed to remain internationally competitive. For example, he suggested that carcase information derived from Dexa technology in processing plants could potentially lift both farm and processor productivity.

So far, the sector has remained competitive through productivity growth and by developing world-leading integrity systems. These two factors have distinguished Australia from its competitors and allowed it to maintain access to high-value markets such as Japan, Korea and the EU.

“Information — be it farm-level information about production systems and chemical use provided by producers to processors, or feedback information on carcase performance provided by processors to producers — will be absolutely critical in achieving future improved productivity through the value chain,” he said.

Keogh identified the transparency of market information and the robustness of rules governing market behaviour as two crucial factors in maintaining investor confidence. Therefore, the future of the red meat industry is reliant on improving these.

“Whether they are aware of it or not, those seeking to restrict market information flows and reduce the availability of objective performance data in Australian livestock industries are really attempting to consign the livestock industries to a no-growth future.

“The choice before the sector is quite stark. A stagnant future characterised by low productivity, uninformed producers and a market characterised by anti-competitive behaviour, mistrust and low levels of investment, or a profitable and growing industry that is innovative, has high levels of investment and efficient information flows that enable it to successfully evolve to continue to meet consumer needs,” Keogh explained.