Australia-Leading meat boss speaks about his veiw on current meat trading conditions.

AUSTRALIAS LEADING PRIVATE MEAT PROCESSOR SPEAKS OUT.

REGULATORY cost burdens are the biggest threat to the Australian red-meat industry, according to a Warrnambool processor.

Midfield Meats managing director Colin McKenna said that despite demand for Australian beef being the strongest it had ever been, the cost burdens imposed by government agencies threatened the future of the sector.

Opening the 50th Ardno bull sale at Wingeel last week, Mr McKenna said future opportunities for Australian beef were great and he had not seen such strong demand, worldwide, in 35 years.

"The threat we’ve been hearing about from the South Americans over the years isn’t there now - they are a spent force," he said.

"Their prices are now dearer than ours. The biggest issue is not consumer demand, not that we are trading in a world that is in recession, or depression. The beef industry is still getting the same prices as five years ago.

"The threat to the cattle and sheep industries is not demand, but comes from the regulatory bodies that we have in this industry that impose huge costs on us.

"That is what will squeeze producers to the wall."

Mr McKenna said Australian Quarantine and Inspection Service charges on his processing plant would increase by 90 per cent in July due to the removal of a government subsidy.

"And that (the cost burden) will come from one place, and it’s sad to say, it comes from the producers’ (income)," Mr McKenna said.

Mr McKenna called on producers and processors to lobby groups such as Meat and Livestock Australia and the Australian Meat Industry Council to make their case to parliamentarians about the rising costs.

Other costs, such as electricity, had also risen, he said.

"How can we possibly survive, or be expected to cope with, these cost increases that the government bodies pass on to us?" he said.

But Mr McKenna said it was worthwhile hanging in there, because the global demand for beef would be insatiable within five years.

Federal Agriculture Minister Tony Burke said the decision had been made to remove the 40 per cent subsidy on the certification of agricultural exports by AQIS beyond June 30 this year.

Instead, the Government would invest in a better biosecurity system.

Mr Burke said AQIS was trying to make the system fairer for everyone, because some sectors were paying a higher share of exporting costs.

"In the meat industry, for example, everyone benefits from the export industry, from growers through to abattoirs, boning rooms, cold stores and finally the exporters themselves," he said.

"But the costs of certifying meat for export are not evenly shared."