18 June 2008Editor Steve Martyn, Level 2, 460 Pacific Highway, St Leonards NSW 2065 Tel +61 2 90862240 Fax +61 2 9086 2201 Email smartyn@amic.org.au Web www.amic.org.au
Issue No. 23/08 Tuesday 17th June 2008
�� Vale Keith Lea – One of the first people I met in the meat industry, Keith Lea sadly passed away this week after
a lengthy illness at 59. Keith began as an Angliss cadet at Riverstone in the late 1960s and worked for many years
with C.Itoh in Sydney before moving to Tasmania with Richardson Meat Industries. He returned to NSW in 1989 as
part of the B&G Trading Group. Keith was a gentle, loyal and affable soul, a good friend and successful trader for
many years. Sadly his wife Christine passed away only last year. Our very deepest condolences to his children,
family and friends. Keith will be warmly remembered by all who were lucky enough to know him.
�� EU Delays Launch of Organic Logo – The launch of the European Commission’s organic logo scheduled for
2009 has been delayed following complaints it was too similar to a symbol used by German supermarket Aldi. The
news may signal problems for organic manufacturers, especially those who have started to prepare for the logo to
come in at the previous anticipated start-date of next year. The logo was first suggested by the European
Commission in 2007 and was designed for mandatory use on products that are 95% or more organic and free of
genetically modified organisms (GMO). However, Germany-based retailer Aldi recently contacted the Commission
to raise concerns over the similarities between the new green logo and its own symbol. The European Council of
Ministers has now been asked to delay the launch until 2010. Voluntary labels are still in place.
�� Fertiliser Prices – A Chinese export tax on all fertiliser and fertiliser inputs is helping to underpin price rises for
urea. According to a source in the fertiliser industry, the Chinese have implemented a further 100% export tax taking
the tax levels to 135% and making all exports prohibitive. The reduction in world supply has already seen a rise of
more than A$100 per tonne in the international urea price. The flagship Middle East granular urea price broke the
US$500/t in early April and has continued o climb. The Olympic Games have also disrupted key farm chemical
supplies such as glyphosate as the Chinese shut down production plants to minimise air pollution. The withdrawal of
the Chinese will leave a crucial gap in world markets. Sources suggest China exported 5.9 million tonnes of Urea for
the entire year of 2007. .
�� Ethanol – Australian Mandates A Problem – Currently ethanol producers in Australia are effectively exempt
from paying the current fuel excise of 38.143¢/litre. The NSW Government (with currently a 2% mandate) proposes
to implement a 10% ethanol mandate by 2011, QLD a 10% mandate soon after while WA is proposing a 5%
mandate by 2011. With capital grants, State mandates and effective tariffs on ethanol imports, Australian
Governments provided $95m in support to the ethanol industry in 2006/07 – more support per litre of ethanol than
that provided by the US Government. Ethanol production in Australia has stagnated on the back of high grain prices,
in part created by themselves. The International Food Policy Research Institute in Washington has concluded that
following US Government assistance annually of $11-13billion, ethanol production is responsible for 39%, 22% and
21% of the increase in world corn, wheat and rice prices between 2000-2006. State Government mandates can only
exacerbate such impacts. The Australian Lot feeders have called for the removal of Government assistance as it
only distorts grain markets, creates an unlevel playing field in the competition for grain while leading to higher food
prices. It is also inconsistent with Australia’s stance at the World Trade Organisation.
�� Uruguay – A USDA audit team is in Uruguay auditing its thermo processed beef production system. The US
imports close to 50,000 tonnes a year of thermo processed beef (i.e. cooked), almost all of it from South America. In
2 weeks time a Mexican audit team revisit Uruguay as the current 2-year certification from Mexico expires.
�� Paraguay – While hopeful of regaining access to the EU following the recent EU audit, trade sources advise only
38 properties in Paraguay comprising around 300,000 head of cattle, are accredited for the EU. Paraguay has a
cattle herd of over 10 million and a 1,000 tonne EUHQB quota that has remained unused for a number of years.
�� Columbia – Media reports that Columbia has an FMD outbreak near the border with Venezuela. Columbia has
over 11 million head of cattle in what has been recognised to date as free from FMD with vaccination.
I TEMS OF INTEREST THIS WEEK
AMIC 2008 MEAT CONFERENCE
Monday 8– Tuesday 9 Sept 2008
Sheraton Mirage Resort,
Gold Coast
Contact the Executive for any queries
regarding the Trade Exhibition
Editor Steve Martyn, Level 2, 460 Pacific Highway, St Leonards NSW 2065 Tel +61 2 90862240 Fax +61 2 9086 2201 Email smartyn@amic.org.au Web www.amic.org.au
�� Argentina – A truce between the Government and farmer unions appears to be working for the moment as both
sides appreciate the impact it has been having on the whole economy although no clear resolution is in sight. Cattle
movements have returned to some normalcy although 50% of arrivals at the Liniers market in Buenos Aires are
cows, reaffirming fears that a move out of cattle into grain in some areas is continuing. Trade sources report that
Argentina still has over 1,100 tonnes of 2007/2008 EU HQB quota unused with the quota year ending June 30.
�� Callinan Report – Change in the Wind for AQIS – As forecast in Prime Cuts a few weeks ago, former High
Court Judge Ian Callinan has delivered a damning report on AQIS over the equine flu outbreak last year. The
Government has accepted all 38 recommendations from a 345-page report into the outbreak. “It would be difficult to
imagine a more complex and dysfunctional structure (in AQIS) so far as it relates to horse importation than the one
under which the failure occurred” Commissioner Callinan said. He found management systems in AQIS failed to
bring to the attention of its senior executives that protocols for the quarantine of horses at its Eastern Creek station
in western Sydney had not been followed. Agri Minister Burke said the report showed AQIS lacked clear lines of
communication and was a “maze of bureaucratic confusion”. AQIS was a “place of ignorance, misunderstandings
and misconceptions about fundamental matters”. Mr Burke said the report had found ‘clear inadequacies’ in the
quarantine system which will cost at least $1.3m to fix. The Federal Government has already spent $342m
eradicating the virus. Mr Callinan made no findings on legal liability but identified fundamental management and
biosecurity failures. Mr Burke said he had appointed the former head of the Department of the Prime Minister, Peter
Shergold, to oversee the reform of the quarantine regime. Dr Shergold will report regularly to Mr Burke over the next
2 years. AQIS Executive Director and Deputy Secretary of the Department, Stephen Hunter, has stood aside to
allow these changes to occur. Mr Burke said he had no doubt that compensation claims would be tested in the
Courts. In combination with the Beale Review on Quarantine & Biosecurity currently underway, it will likely bring
substantial change to parts of AQIS. AMIC’s submission to the Beale Enquiry is available from the Executive.
EXPORT / IMPORT / MARKET ACCESS
RUSSIA
The Russian Consumer Protection Service(RCPS) proposed sanitary regulation banning the use of frozen meat in food
processing will apply only to poultry product. There will be a phased introduction of the regulation commencing on 1st
January 2010 “for selected products” (especially associated with baby foods) and extending to 1st January 2011 for all
product that use frozen poultry. The proposed regulation also refers in some detail to packaging, including shelf-life. The
RCPS apparently does not regulate shelf-life of products but allows the producer to set shelf-life, provided that the food
meets food safety regulations. Accordingly, a claim for shelf-life of 70 days for chilled meat, for example, should be
acceptable to the Russian Consumer Protection Service. However, the Russian Veterinary Service may not be of the
same view were in lies the problem with imported chilled vacuum packed meat. The proposed regulation will be
available shortly on the internet. In conjunction with external specialist institutes, the Russian Ministry of Agriculture is
also developing a technical regulation on further processing of meat. One of its objectives is to provide definitions of a
number of items, including minced meat and the contents of sausages. Russian authorities have continued to apply
what they see as stringent processing standards on all imported meat products, withdrawing approval from 57 meat
establishments in the EU as at the 10th June, with Spain, Germany and France the main countries affected. Russia has
however lifted the temporary ban on beef from the central Brazilian State of Mato Grosso. The ban remains valid in one
of the districts of the state (Cocalinho) where on 15 Feb.’08 an outbreak of vesicular stomatitis was registered.
UKRAINE
Further to advice last week, AQIS has now received conformation from Ukraine that they require supplying plants to be
EU accredited. This was contrary to advice to this point. At this stage AQIS is unaware of any requirement for product to
be sourced from EU eligible livestock and further enquiries are taking place. There is product in transit that is not from
EU accredited establishments and AQIS is endeavouring to ensure this product gains access, especially as similar
product has gained access in recent weeks. We will advise any developments.
KOREA
The size of the public demonstrations in Korea over US beef access has surprised all. Police dispatched almost 20,000
troops to control one rally in Seoul. The US continue to oppose a renegotiation of the beef agreement with Korea but
are pursuing options for labelling ‘beef packaging’ with the age of the cattle processed as a way of addressing Korean
sensitivities. The Korean Trade Minister visited the US this week, to get agreement to not ship product from animals 30
months or older. Whether that will be enough to quell the disquiet remains to be seen?.
EU – RECENT AUDIT OF AUSTRALIA
The EU review of Australia’s meat and dairy inspection and certification systems was held 22 May to 4 June 2008. The
EU reviewers provided AQIS with a preliminary report on their main findings which will be followed with a formal detailed
report in due course. The main preliminary findings include animal sourcing and traceability, particularly as it relates to
the use of sheep NLIS and NVD correlation. While animal welfare was not compromised during the audit, it was an
issue of particular focus. Any queries contact the Executive.
Editor Steve Martyn, Level 2, 460 Pacific Highway, St Leonards NSW 2065 Tel +61 2 90862240 Fax +61 2 9086 2201 Email smartyn@amic.org.au Web www.amic.org.au
L I V ESTOCK I SSUE S
(Contact – Christian Mulders Tel: 02 9086 244 or email cmulders@amic.org.au )
�� Government will cover the cost of 2007 Horse Flu response – The Rudd Government will not levy the
horse industry to repay its share of the cost of eradicating the 2007 equine influenza outbreak. Agri-Minister Burke
said the former government failed to make arrangements for the horse industry’s emergency disease preparedness,
despite sitting on an industry proposal for more than a year. As early as 2006 the horse industry proposed a levy to
protect the industry against the impacts of emergency disease outbreaks. This would take effect under Australia’s
Emergency Animal Disease Response Agreement, under which the Federal Government meets cost and recovers
an agreed share from industry, usually over 10 years. Mr Burke said it would not be proper to legislate
retrospectively to recover costs for the 2007 outbreak, since industry was not a signatory to the agreement at the
time. The Bill is now expected to pass, but with a levy to remain at zero until agreement is reached with industry on
measures to deal with any future disease outbreak. The Federal Government has so far spent more than $342m
eradicating the virus and in financial assistance to individuals, organisations and businesses. They will now sign up
to a national agreement for responding to emergency animal diseases of any type.
.
INDUSTRIAL RELATIONS
No Report
OCCUPATIONAL HEALTH & SAFETY (OH&S)
No Report
I N THE NEWS THIS WEEK
�� A Third Retailer? – Discount food retailer Aldi is beginning an increased roll-out of stores in Australia, with
Queensland being a major focus of the company at the moment. Aldi has purchased a site in Beaudesert’s business
centre and is now beginning construction on the retail centre. Aldi are also planning to have supermarkets in
Beenleigh and in Mudgeeraba on the Gold Coast. This would increase their number of stores to eight on the Gold
Coast, with the potential for up to 25 stores in the region. Further, the ABC reports that Aldi has now received
conditional approval to use a former Bi-Lo site in Muswellbrook, NSW. The continued expansion of Aldi retail outlets
comes amid claims that there is great potential for a third supermarket chain to have a major impact in Australia,
following public criticism of the big two. Aldi already has 167 stores operating in Australia and, with plans to increase
that number to at least 400 in the coming years.
�� Bumper Rice Harvest for 2008, FAO – World rice production is set to reach record levels in 2008 according
to the UN Food & Agricultural Organisation (FAO) which has quelled fears that sharp price hikes in rice at least will
continue indefinitely. World paddy production 2008 could grow by about 2.3% reaching a new record level of 666
million tonnes, according to preliminary forecasts. The cyclone disaster in Myanmar (Burma) could well worsen the
forecast. In the aftermath of Cyclone Nargis which hit Myanmar May 3, the price of rice went steadily up based on
fears of loss of production in the devastated region. However, FAO has now forecast that a simultaneous boost in
production this year will offset shortages over the long run. While world rice prices are likely to remain high in the
short term as the world waits for 2008 crops to be harvested, this could be offset when more rice makes it to market.
Between Dec.07 and April.08 the price of rice shot up by approx. 76%, according to the FAO Rice Price Index. Fear
surrounding prices in turn led some of the main rice producers to block imports and stockpile. This year four of the
leading rice exporters (China, India, Egypt and Vietnam) have either imposed minimum export prices, export taxes
or export bans on rice to protect against inflation at home. This will reduce the amount of rice traded internationally
by 1.1 million tonnes compared with the 2007 trade. At the moment only Thailand, Pakistan and the US, among
leading exporters, are exporting rice without any constraints. According to FAO figures, Myanmar was expected to
export 600,000 tonnes of rice in 2008.
.
Page ‘3’
THE DOMESTIC SCENE
Issue No. 23/08 Tuesday 17th June 2008
NEWSLETTER
PRIME CUTS |
