Beef price lifts are a flow-on from record cattle market, not profiteering

Beef price lifts are a flow-on from record cattle market, not profiteering

Beef
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Retailers move to explain drivers of red meat retail prices

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PANIC buying of red meat has helped retail demand hold up despite the upward pressure put on meat prices as supply dried up post-rain.

However, the parallel dynamics at play have made the scene ripe for accusations of profiteering on the part of retailers.

Butchers and red meat industry leaders have moved to explain some of the drivers behind elevated prices and both have condemned price gouging as unacceptable in a national emergency.

Instances of mince being pushed up to as much as $28 a kilogram in metropolitan areas were the result of butchers opting to use higher-value cuts to meet demand, prominent independent meat retailers said.

Across-the-board lifts in beef prices had come as a flow-on from the red hot demand for stock following widespread eastern seaboard rain from January which pushed the cattle market to record highs. The young cattle market lifted 58 per cent in less than two months and grid prices jumped 60 cents a kilogram.

While that has eased somewhat now, the effect in meat cabinets only just started to be felt as the panic buying started.

Supermarket bosses have given public guarantees price hikes had been ruled out, although they have made the point regular specials - especially those encouraging buying in bulk - had often been canned.

In some supermarkets, mince was actually on special on the weekend, with in-store butchers saying demand was fluctuating in the extreme and matching it to supply was very challenging at the moment.

Many butchers say they have actually opted to absorb rising livestock costs at this time to avoid perceptions of capitalising on panic buying demand, conscious of the long-term reputational damage that could incur.

Umbrella industry body the Red Meat Advisory Council said if profiteering was happening during a time of national emergency, it was absolutely not on and customers should escalate this with the Australian Competition and Consumer Commission.

RMAC said there had been extraordinary demand for Australian red meat at supermarkets, butchers and wholesalers, confirming it was part of a healthy staple diet.

It also explained other factors at play in determining retail prices at the moment.

"Despite prolonged droughts since 2013 across Australia, red meat is one of Australia's most popular proteins and prices are higher on the back of seasonal conditions. This is part of a normal cycle for a popular food reliant on weather cycles," RMAC said in a statement.

"We anticipate that current demand will flatten in the immediate future although this will very much depend on the extent of household stockpiling, and minimising disruptions to our supply chains."

Sydney retailer Craig Cook, who runs 19 butcher shops, said the bumped-up demand was largely across cuts people could make into a meal and freeze.

"It's chuck, blade, shin, diced lamb and beef and of course mince," he said.

"The days of barbecue steaks are gone at the moment."

He said butchers expected to be trading well for a long time.

"The normal as we understand it has changed. People are now buying for three meals a day at home."

Mr Cook said social distancing rules had meant it was not possible to put on extra staff but consumers were understanding of the situation and willing to line up outside.

Inspectors had been active in checking distancing in shops over the past week, he said.

Ongoing trend

Retail prices of beef and lamb have been rising for many years. Last year all major proteins reached record-high retail prices, Australian Bureau of Statistics data showed.

The average retail price of beef for 2019 hit $20.64/kg, a 6.3 per cent rise on the previous year.

The average retail price of lamb for 2019 reached $17.56/kg, up 12pc.

Since 2000, the retail price of beef and lamb has risen 93 per cent and 162pc respectively, Meat & Livestock Australia data shows.

Consumption, however, has remained resilient.

Beef remains the largest retail fresh meat sales category value-wise at 35pc and Australians still consume 25 kilograms per person per annum, a figure that has remained steady in the past three years.

SEE ALSO: Butchers run off their feet

Cattle prices still haven't hit a record in real terms

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The story Beef price lifts are a flow-on from record cattle market, not profiteering first appeared on Farm Online.

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