Agriculture Minister Murray Watt has refused to commit the government to an ACCC inquiry into supermarket meat prices, saying a review of the food and grocery code is already under way.
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Calls from Nationals leader David Littleproud to hold a price inquiry follows big drops in the prices that farmers are receiving for sheep and cattle at the saleyards, while supermarket prices remain high.
Beef farmgate prices have fallen at least 40 per cent since peaking in March, but supermarket prices have only just started coming down.
Sheep prices have also fallen to similar levels but remain high in the supermarkets.
Senator Watt has been calling on retailers to drop their prices for meat and other products for months and has welcomed a move by Woolworths to cut the price of lamb.
"We need to see more - from them and the other big supermarket chains," he said.
"We know lower prices can take some time to filter from the farm gate to the checkout as long-term supply contracts wrap up, but supermarkets need to be more transparent."
And he says a government review is already under way which will be used to apply pressure to the big supermarkets, while penalties on retailers could be increased as a result.
"Our Food and Grocery Code review is already taking a close look at the transparency that producers and others get in our food supply chain."
But NSW Farmers wants the ACCC to investigate.
Brendan O'Keeffe, economist at NSW Farmers, says a lack of competition among the major supermarkets is impacting prices.
"Something is wrong in terms of the supermarket level of competition, but that's not proof in and of itself of excessive market power," Mr O'Keeffe said.
"That's why we would like an ACCC inquiry, to provide the evidence and give the government the evidence they need to act."
National Farmers' Federation president David Jochinke is also calling for more transparency in the market, and says a food and grocery code review won't go far enough.
"We've been calling for the ACCC to have more resources to do investigation because we feel like they're completely under resourced," he told AAP.
"We would support an inquiry into the supply chain," he said.
As dry conditions continue Mr Jochinke says the situation for some producers is dire as they struggle to destock
"I've heard of stories of people considering about destocking via euthanising their sheep," Mr Jochinke said.
A spokesperson for Woolworths said the majority of their meat wasn't sourced through the saleyards.
"We're currently paying our long term suppliers more than the industry market indicators for both beef and lamb," the spokesperson said.
"For all our beef, and the majority of our lamb, we partner directly with our farmers and livestock agents to agree on fair prices that reflect the high quality of their meat and market dynamics."
Woolworths said it had dropped the price of almost 60 red meat products in recent months, including 20 per cent off all lamb standard cuts.
Coles general manager Meat, Deli and Seafood, Martin Smithson said Coles had been reducing the price of meat products including beef, lamb and mince.
He too said most of Coles' meat wasa sourced directly from farmers rather than through the saleyards.
"The retail price of meat is not determined by the market price of livestock alone," Mr Smithson said.
"While livestock prices have gone down, other costs in the supply chain have gone up, including transport, processing, packaging and retailing the product on shelves."
Australian Associated Press
