Elders auctioneer Joe Allen (far right), sells a pen at Shepparton Regional Saleyards on Friday. With Mr Allen are Rob Hocking and Andrew Kyle.
Lamb producers are having to wear a huge slump in saleyard prices while supermarkets have not caught up with the cost reductions.
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Federal Agriculture Minister Murray Watt has refused to commit the government to an ACCC inquiry into supermarket meat prices, saying a review of the Food and Grocery Code is already under way.
Calls from Federal Nationals leader David Littleproud to hold a price inquiry follows big drops in the prices that farmers are receiving for sheep and cattle at the saleyards, while supermarket prices remain high.
National sheep and lamb prices since January recorded by the National Livestock Reporting Service.
The VFF says politicians shouldn’t use supermarkets as a smoke screen as they probe into grocery prices through the recently announced Senate inquiry.
VFF president Emma Germano said while supermarket power and competition should be examined, so too should the impact of government decisions on the cost of producing food.
“It is hard not to be cynical in thinking politicians are wanting to use the supermarkets as a smokescreen for their policies that are driving up costs for farmers and consumers,” Ms Germano said.
“Parliament must be looking at how government is directly contributing to peoples’ grocery bills through policies that increase the cost of production and doing business across the supply chain.
“Government policies are leading to ever increasing energy, water and labour costs, whilst the failure to invest in infrastructure is driving down productivity.
“The last thing farmers want to see is another political sideshow that doesn’t solve the real issues.”
Ms Germano said investigating supermarket prices would have little benefit as governments won’t step in and regulate. Examining how supermarkets use their power to dominate their relationships with farmers would be more useful.
“The idea that government will come in and start regulating food prices is nonsense and any move to do so would not be supported by the VFF,” she said.
“The most important thing this inquiry can do is to focus on how supermarkets use their power to manipulate markets and create unfair trading terms for suppliers.
“We have one of the most concentrated domestic grocery markets in the world.
“There’s no denying that having two retailers controlling two-thirds of the market hurts competition and both farmers and consumers pay the price.”
Senator Watt has been calling on retailers to drop their prices for meat and other products for months and has welcomed a move by Woolworths to cut the price of lamb.
“We need to see more — from them and the other big supermarket chains,” he said.
“We know lower prices can take some time to filter from the farm gate to the checkout as long-term supply contracts wrap up, but supermarkets need to be more transparent.”
And he said a government review was already under way which would be used to apply pressure to the big supermarkets, while penalties on retailers could be increased as a result.
“Our Food and Grocery Code review is already taking a close look at the transparency that producers and others get in our food supply chain.”
Lamb for sale in Shepparton at $32/kg.
National Farmers’ Federation president David Jochinke is also calling for more transparency in the market, and said a Food and Grocery Code review would not go far enough.
“We’ve been calling for the ACCC to have more resources to do investigation because we feel like they’re completely under resourced,” he told AAP.
“We would support an inquiry into the supply chain.”
A spokesperson for Woolworths said the majority of their meat wasn’t sourced through the saleyards.
“We’re currently paying our long-term suppliers more than the industry market indicators for both beef and lamb,” the spokesperson said.
“For all our beef, and the majority of our lamb, we partner directly with our farmers and livestock agents to agree on fair prices that reflect the high quality of their meat and market dynamics.”
Woolworths said it had dropped the price of almost 60 red meat products in recent months, including 20 per cent off all lamb standard cuts.
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