|Six-month dollar nightmare for WA meat processor
By PETER HENDERSON - Australia
Thursday, 13 December 2007
FREMANTLE-BASED meat exporter, Carl Wheeler, wants to forget when the Australian dollar's value started climbing to new heights six months ago.
With the dollar still riding high, having peaked in November at a 23-year high of US93.8 cents, financial institutions were talking about it matching the US dollar.
The strength of Australian currency has also been linked to lower returns for WA producers as more eastern States' beef that normally would go overseas has been diverted to WA.
Mr Wheeler, managing director of Floreat Meat Exporters, says the past six months had been the toughest of his 30 years in the business.
"Once the Australian dollar got to US84.5c we virtually stopped trading, we became uncompetitive and that's when the other cheaper meat kicked in," he says.
"We can do business all day long at around US78.5c when we are competitive world wide."
With little turnover from meat transactions Mr Wheeler traded on the currency market which was a risky business because of the dollar's volatility.
"I didn't become a meat trader to trade currency but we had no choice because at one stage our order books were easily down by 60pc," he says.
Mr Wheeler says the volatile Australian dollar has been a big headache and hoped any further corrections would be gradual.
"Normally currency moves up 50 points a week but it was going up 200 points," he says.
"It has been a very stressful time and has gone on far too long for everybody.
"It has been most demanding because you have no control of what is happening around you.
"The problem is the US dollar rules the world."
Mr Wheeler does not think a proposal by WA producers to start a co-operative abattoir would be a solution to their low prices.
"Farmers have got to be careful, they have to be realistic, it does not matter what abattoir is in the area, the prices it can pay are dictated by overseas demand," he says.
Mr Wheeler, who exports mutton, lamb and beef, says the only abattoirs that survive in Australia are those that are family run or have support from US or Japanese backers.