Domestic Lamb

WA sheep producers throw in with sheepmeat council market study

Terry Sim, March 22, 2017

WESTERN Australian sheep producers are hoping growing disparities in lamb, sheep and skin prices between the eastern states and WA will be addressed by a new study into sheep meat marketing.

Peak sheep meat producer body, the Sheepmeat Council of Australia today announced it and Meat & Livestock Australia would undertake a market structure and systems study to evaluate structural differences in sheep marketing across the country.

WAFarmers Livestock Council president and SCA director John Wallace said through the study the WA industry would understand the structural differences leading to WA producers consistently receiving less for their sheep, lambs and skins.

“Once we have a better understanding of how sheep marketing structures and systems work around Australia, WAFarmers and the wider Western Australian sheep industry can start to develop policies to address the issue.”

WAFarmers Livestock Council executive officer Kim Haywood said the state farming body has had discussions with the ACCC and the SCA may lead to an ACCC study, but this would need a focus on one or two clear issues.

Ms Haywood said there has been average 36c/kg difference in price for 21kg cwt lambs between the eastern states and Western Australia over the past five years.

“That price difference is getting wider between the west and the east for a 21kg lamb.

“In 2016 that price variation widened up to an 86c/kg difference,” she said.

“The concern last year was that that price discrepancy is getting wider and wider.”

Ms Haywood said WA producers were only being paid $1-$3 for good quality lamb skins, whereas the same quality pelts were making up to $13-$15 in the eastern states.

“Which seems bizarre given we are so close to China which mainly does all the processing of the skins.”

ACCC ‘failed’ to address sheep industry issues

SCA chief executive officer Kat Giles said the SCA had strongly recommended that the Australian Competition and Consumer Commission do a holistic red meat market study, including sheep meat marketing.

“That’s what we initially asked the ACCC to do and they agreed to do; however, when the study that came out it was a beef-only study.

“We have recognised that within the study that they produced they have said that the implications will be throughout the red meat industry and not just in the beef industry, but they’ve failed to actually address the issues

specific to the sheep industry,” she said.

“Yes, it would have been nice for the ACCC to do it, we’ve recognised that they haven’t done that, so as an industry we need to find that information out.

“Many of the recommendations in the (ACCC) report will have implications for the sheep industry, so it’s important for us to have an understanding of the structures and systems currently in place in the sheep industry so we

can work with the Red Meat Advisory Council to respond to the recommendations.”

Sheepmeat council seeking producer input

Dr Giles said the SCA was not necessarily hoping that the sheep meat study would lead to an ACCC inquiry.

“All we are really looking for is for us to respond to the recommendations of the beef study and make sure that the sheep producers’ views are incorporated into those responses.”

She said a key first step in the sheep marketing study will be a detailed investigation phase.

“While the research design is still to be finalised, producers who are interested in participating in the study should contact their local state farming organisation.

“In consultation with SCA, MLA are currently finalising the terms of reference for this initial investigation and expect to commence the tender process in a matter of weeks,” Dr Giles said.

“Price differences between regions have been a concern for our members and one way we can help them address this is to conduct a study on sheep meat market structures and systems.” she said.

To enhance localised policy development and advocacy the final study will be made available to all state farming organisation members and sheep producers, the SCA said.

ACCC to look at sheep industry allegations

An ACCC spokesperson last month told Sheep Central said the ACCC had received a small number of enquiries about the sheep industry as part of its cattle and beef market study.

“However, investigations are conducted confidentially and the ACCC does not comment on matters it may or may not be investigating.

“Therefore, we cannot provide any specific information on the outcomes of our enquiries.”

The spokesperson said although some sheep industry participants have expressed interest in the ACCC conducting a similar study of the sheep industry, the ACCC did not conduct such a study on this occasion.

“The ACCC notes that there are some similarities in market structure between the cattle and sheep industries.

“Therefore, the ACCC encourages other industries, including the sheep industry, to consider whether the recommendations in the final report should be implemented more broadly,” the spokesperson said.

“However, as the ACCC did not conduct a full market study of the sheep industry it is not in a position to provide detailed recommendations and comment on the sheep industry in particular.

“At present the ACCC is prioritising its work in competition and consumer issues in the agriculture sector,” the spokesperson said.

“This means that we will look closely at allegations of unfair contract terms, cartels, and misconduct in all sectors of agriculture, including the sheep industry.”

Late last year former WAFarmers president Dale Park suggested that the ACCC undertake a market study of the lamb and mutton sector, saying he believed WA processor V. and V. Walsh bought and supplied lambs for the two major supermarkets, Coles and Woolworths. Mr Wallace told Sheep Central then that WAFarmers believed the consolidation of corporate structures operating within the sheep meat value chain could be creating unfair competitive environments, “so this may be an aspect the ACCC could consider looking at.”


Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.


Get Sheep Central's news headlines emailed to you -