Beef plan ‘naive’, says MLA

The plan was prepared by solicitors, Hunt Partners, Sydney, following the Armidale beef forum earlier this year and was presented to the audience at the Rockhampton beef forum.

The strategic plan proposes to reduce producer expenditure, increase returns and reduce duplication by splitting MLA into a sheep and beef corporation, introducing a national beef grading scheme, abolishing the Australian Meat Processor Corporation (AMPC) and Red Meat Advisory Council and removing the Australian Quarantine and Inspection Service (AQIS) charges by putting them back onto government.

Hunt Partners partner, Norman Hunt, said a national grading system more like the US model of a carcase-based grading system – as opposed to the existing Meat Standards Australia (MSA) cuts-based system – would help capture more of the domestic market beef for grading, while a restructure of research and development bodies was expected to reduce costs and duplication.

The plan estimated a nationally adopted grading system could increase per capita annual consumption of beef by 2.5 kilograms to 36.3kg a year, which it estimated would take the domestic beef consumption to 62 per cent of current beef production.

Mr Hunt said the problem with MSA was that it hadn’t been adopted by large sectors of the industry (including much of the supermarket sector), and so most beef Australians ate was ungraded, “and a lucky dip for eating quality”.

“If uptake of MSA was able to be extended to embrace most of the beef sold on the domestic market, we would end up with the same result (as the strategic plan aims for),” he said.

The release of the plan comes soon after MLA announced MSA’s year-on-year increase in uptake of about 27pc, to take the number of MSA-graded carcases to 1.25 million for the year to the end of June.

Mr Heatley said MSA was now making headway into the supermarkets, with Costco and IGA stores stocking MSA-graded beef, which demonstrated a slow, but progressively expanding market share for graded beef.

While the carcase-based grading scheme was working well in the US, Mr Heatley said the adoption of a similar system wouldn’t work as well in Australia because the US system was based on subjective assumptions and the US had a different production system.

He said the US system wasn’t “test driven” with consumers to see what they wanted.

“MSA has repeatedly put meat in front of consumers for sensory testing to see what they want, and what the industry needs to provide,” Mr Heatley said.

“It should be the industry listening to the consumer.”

He said the US system was based on an industry with about 98pc grain finishing, whereas Australia finishes only about 34pc of its beef on grain.

As for the rate of uptake of the US system, he said it took 20 years before it gained widespread acceptance, so it was still early days for MSA.

The proposal to restructure the research and development (R and D) sector was to tackle what Mr Hunt said was a system which duplicated research and channelled levies into limited areas of industry.

He said MLA and the AMPC both had R and D programs allowing individual companies to apply for jointly funded programs.

He said these were partially funded by industry levies, but the only party gaining from the research was often the successful applicant, rather than the whole of industry.

Therefore, the plan proposed new R and D bodies be developed which were fully funded by government.

“The whole industry wants to decrease costs by government, but (this plan) is an aspirational wish list which different bodies have been lobbying for for many years,” Mr Heatley said.

“It is a work in progress and I find it a little naive to find anybody could think the current industry structures weren’t set up to achieve this already.”

Mr Heatley said the plan came as MLA was about to launch its $5 million campaign which will include an MSA logo with an eating quality description and cooking methods at point of sale.