Cost of Ground Beef in Melbourne Australia
It is not your imagination, meat is costing more right now.
Key points:
- The price of cattle has skyrocketed during the pandemic, pushing up meat prices
- One of the biggest factors has been the lack of stock on the market after the most recent east coast drought
- Herds are now rebuilding, but international demand should keep prices high
According to Meat and Livestock Australia, the meat industry's marketing and research body, retail prices are up 10 per cent per kilogram compared to this time last year.
Josh Liebeck who owns Plantagenet Meats, a butcher shop in Mount Barker four hours south of Perth, said he had to put his prices up even higher despite operating in the heart of Western Australia's cattle country.
While the price jump is probably hard to stomach for consumers, beef producers are enjoying their largest windfall in years.
Alida Parke farms at Lake Muir, about 350 kilometres south of Perth, and sold 90 weaner steers in January for an average of $2,200 per animal.
"This year was a first for me in that I sold my weaners, or some of my weaners, at just eight months old [weighing 395kg-420kg] … which was just amazing," she said.
"It was because of the year that we have had, of such good rain."
Erica Henderson, the assistant manager at the Mount Barker Regional Saleyards, said she had never seen prices so good.
So what's causing the price jump?
The weather
According to Scott Cameron, a strategist for Meat and Livestock Australia, the weather has played a big part in pushing up the price of meat.
"We've seen some fantastic growing conditions and that's off the back of a couple of years drought, or some of the worst drought that we've seen in recent history, which resulted in a liquidation of our herd," he said.
"Over those last couple of years producers have decided to hold on to their cattle to grow their herd and put less animals through to processors, which means that there is a contraction in supply, or pressure on supply, which has an upward impact on prices."
International demand
Mr Cameron said other factors like increasing transport costs and labour shortages had also pushed prices up, but supply and demand were the biggest factors.
"High demand in those high value markets puts increased pressure on retail prices here domestically."
Keeping them fed
Farmers need pasture to feed their cattle, meaning many have serious fertiliser bills.
Australia imports a significant amount of fertiliser, so when China started holding back supplies for its domestic market during COVID-19, Australian farmers were left scrambling to get hold of it.
Alida Parke was one of them.
"I locked it in early because I got told that the price was going up," she said.
To her mind, Australia as a nation should be making more of its own fertiliser to ensure food security.
"Yes, it's going to be an extra cost because of the way income is for employing people [in Australia]," she said.
Will prices come down any time soon?
According to MLA's Scott Cameron there's little chance of the cattle price bubble bursting this year.
"Prices at the moment are sort of stable at that higher price point," he said.
It also looks like supermarket meat prices will stay where they are too.
"Consumers are actually paying more for their red meat," Mr Cameron said.
"[In] the last quarter we've seen an increase in spend on red meat of 3.5 per cent versus last year.
"So there is that indication that consumers are continuing to pay premium prices for red meat."
Watch this story on ABC TV's Landline at 12:30pm on Sunday, or on iview.
Source: https://www.abc.net.au/news/rural/2022-02-11/why-meat-is-costing-more/100814638