• jmcdonnell64

Supermarkets Flush with Toilet Rolls but the Steaks are High

Contrary to some media reports Coles and Woolies have not run out of toilet paper although some Costco big box stores did. Not only that but the Prime Minister, Scott Morrison told a press conference on Tuesday that the manufacturer Kimberley Clark was going gang-busters to produce more lavatory supplies.

“Now a very good example is Kimberley Clark, which makes toilet paper,” said Morrison. “They have now opened their line of manufacturing in South Australia. I welcome that. And that’s a direct response having worked with the retailers. I am sure everybody is relieved.

“It is a great example of the economy in motion,” the Prime Minister announced (no doubt pun intended). It is a good thing Kimberley Clark has moved onto 24-hour shifts.

In the mean-time cattle prices have hit record highs as a consequence of the drought and cattle farmers disposing of large portions of their herds. Flowfm’s friendly butcher tells us that the price of beef and lamb has been rising for the last three months even though their supplies are protected because they grow their own. The price of cattle has skyrocketed since the January rains with many farmers wanting to replenish their herds.

This is having a negative impact on abattoirs who are having to lay off workers adding to unemployment in regional centres. Meat processing is the biggest employer in some country areas. The dismissal of the mainly casual workers will have a ‘knock on’ effect on other small businesses in the same towns.

The eastern young cattle indicator reached a record high of $7.31 a kilogram this week up by over 70% on this time last year. The Meat and Livestock Corporation says that lamb is averaging $9 a kilogram which is not quite a record. However, a recent sale of lambs in Ballarat smashed a national record when they realised an average of $380 a head.

Mr Patrick Hutchinson of the Australian Meat Industry Council has predicted that consumers will face price rises of 15% in the near future. It is likely that the rises will not be so high in big supermarkets because they can spread the damage over a big range of items but small shops and butchers will probably see their customers eating more pork and chicken.

On the other hand, it is unlikely that prices will rise much further because of the uncertainty of the export market generated by the coronavirus. However, by the time these export cattle are redirected to the domestic market there may not be enough meat processors around to deal with them.

People in the meat industry are unhappy because, while the Morrison Government has provided billions in assistance for drought affected farmers including money for restocking, it has done nothing to assist the meat processing industry. The meat industry is asking the state governments to forgo payroll tax for abattoirs so they can keep their workers employed until the meat supply chain picks up. The Australian Bureau of Agricultural and Resource Economics and Sciences is predicting that the bush will bounce back this year but it is a matter of many towns hanging on until then.

The state governments will probably demand that the federal government compensate them for the loss of payroll tax. But that will depend on whether it fits within the coronavirus stimulus package. The whole rigmarole is enough to have to country people reaching for their toilet rolls.

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