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Mecardo Blog

5 reasons why transparency is important in the cattle industry

Posted by Matt Dalgleish on 18 November 2019

The Australian Competition and Consumer Commission (ACCC) announced in early April of a market study into the cattle and beef industry to be undertaken this year. Issues covered by the study are wide ranging but a particular aspect of the investigation that caught our eye was the focus on greater transparency with regard to profits and margins along the beef supply chain.

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Topics: Australian cattle industry, beef price

To shear or not to shear, is that the question?

Posted by Robert Herrmann on 18 November 2019

For some time, there have been messages from wool processors that much of the Australian wool clip is too long. If this is true then shorter lots should attract a premium – this would be a normal economic lever to attract more of the type, and if that is the case can wool producers justify the additional cost of two shearings in one year?

To get to the bottom of this issue, a full understanding of the situation is needed. It is normal for suppliers (wool growers) to want to meet customer requirements (processors). At the same time, meeting the “new” requirement cannot increase the net costs to the business unless there is an off-setting increase in income.

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Topics: Wool market / wool price, Wool industry

Banning GM crops provides a premium in South Australia……..

Posted by Andrew Whitelaw on 18 November 2019

South Australia is the only major crop producing area in Australia which does not allow the commercial production of GM crops. We were tasked by the industry with answering the question:

”Does the GM moratorium, provide a premium price to South Australian farmers?”

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Topics: Grain market / grain price

Wake up call for Australian Agriculture

Posted by Robert Herrmann on 18 November 2019

The latest biosecurity failure in South Africa (SA), the detection of Foot and Mouth Disease (FMD), not only had immediate impacts, with the banning of all movements of cloven foot animals and their products; but also consequential impacts on other SA farm products.

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Topics: Wool industry, cattle, sheep

Grain Swaps - farmers' friend or hazard to be avoided?

Posted by Robert Herrmann on 30 October 2019
  • “I won’t use swaps because if the market goes up I will lose”

  • “I have heard of a wheat farmer who lost his farm as a result of taking a Grain Swap”

  • “The bank always wins; they know more about the market than we do”

  • “With swaps, someone always wins and someone always loses”

Sound familiar?

These are just some of the statements we have heard from farmers when the issue of swaps is raised.

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Topics: Risk management, Grain market / grain price

Social Licence – it’s a rubbish concept!

Posted by Robert Herrmann on 19 July 2019

“Canberra bubble” has been coined the word of the year by the Australian National Dictionary Centre. Mecardo suggests that the equivalent in 2018 for agriculture is “Social Licence”.

Both are somewhat vague in meaning, although they are regularly trotted out by commentators and the plethora of industry opinionated columnists. We have noticed that “social licence” is now pushed to farmers and other agriculture industry participants as something to be “earned”.

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Topics: Australian wool industry, Australian cattle industry, Agriculture, activists

Grain Trade Insolvency - a real danger?

Posted by Andrew Whitelaw on 17 July 2019

In recent weeks Lempriere Grain went into administration, taking with it debts of A$18.8m. This is not the first grain company to fold and will not be the last.

We felt like it was an opportune time to revisit counterparty risk in light of recent industry rumours of a number of grain traders at risk.

Is counterparty risk a major issue, and how can you protect against it?

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Topics: Grain market / grain price, Agriculture

What's the value of the live sheep export trade?

Posted by Mecardo on 17 July 2019

There’s no question that the live sheep export trade is an important market for many Australian sheep producers, but it also supports a raft of other businesses along the supply chain. Help us to determine the value of the live sheep trade to regional Australia and participants in the supply chain by completing these short surveys.

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Topics: live export

A supply and currency boosted wool price cycle

Greasy wool prices have weakened in the past couple of months, from high levels, so the natural question is “What is going on?”. This article is an assessment of the background to the current wool market to help understand where prices are likely to go.

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Topics: Wool market / wool price, Wool industry

When the rains do come, will we see a repeat of the historic 2014 rally?

Posted by Olivia Agar on 17 July 2019

Drought, destocking, and strong overseas cattle prices. The current picture of the cattle market isn't unfamiliar, with many factors on the surface looking remarkably similar to the period just before the breaking of the 2014 drought. So can we expect a repeat of the historic rally?

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Topics: Cattle market / cattle price, cattle, Drought

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