Beef blows family budget

The retail price of beef has risen one dollar a kilogram above last year’s average to 1710 cents a kg, and anecdotally, wholesale prices have risen by 30 per cent since January.

The latest household purchasing data from Nielsen Homescan Australia for Meat and Livestock Australia showed beef is still the most popular protein among Australians, with 35pc of total protein volume.

However, chicken is hot on the trail, lagging behind beef by just 0.2pc.

Australian Chicken Meat Federation chief executive Vivien Kite said consumer growth forecasts show the consumption of chicken could rise by three per cent in the next year.

“A large part of what is driving the growth in consumption of chicken is its competitive pricing and we expect to see even more competitive pricing as industry-wide productivity gains take effect,” Ms Kite said.

Mecardo beef analyst Augusto Semmelroth said favourable export conditions had driven the spike in beef prices.

“For the past two decades we generally sent 65pc of our beef to export, with 35pc consumed domestically, but in the past year (Australia) has started exporting 75pc of its product,” Mr Semmelroth said.

“This has put a lot of pressure on domestic prices and caused a massive spike in wholesale prices, which are being felt right along the supply chain.

“Each layer in the supply chain will try to push those rises to the next stage and inevitably consumers bear them and that’s exactly what we’re seeing now.”

Mr Semmelroth said beef producers wouldn’t be impacted by protein substitution because “dwindling production” during the next two years would support higher beef prices.

Many butchers had noticed the price hike.

Chairman of the Australian Meat Industry Council’s national retail council Ray Kelso, Brisbane, said popular winter beef cuts like chucks and diced beef had maintained their popularity but this wasn’t the case for premium cuts.

Certainly, butchers were realigning display areas to highlight the cuts that were more profitable for them, he said.

Matthew Papandrea of Joe Papandrea Meats in Sydney’s Weatherill Park said he’s selling few big cuts of beef because it’s too pricey for his customers.

In January he was paying around $4.70/kg for carcase weight beef, now it’s up around $7.

“Of course we had to put our prices up and people have stopped buying big rumps and t-bones in favour of cheaper products,” Mr Papandrea said.

He said lamb is proving a popular substitute.

“I’ve had to buy a few more lamb carcases because it’s the same price as beef and people are thinking it’s better value,” he said.

Country Meats owner Scott Easterbrook, who runs shops in Lismore, Goonellabah and Ballina, said the sale of red meat was down across the board.

“We’re selling a lot more chicken now than beef, lamb and pork,” Mr Easterbrook said.

“Affordability is critical for my customers and in the past six months we haven’t sold many whole cuts. I think it’s just such a big shock to their budgets. They’re preferring chicken schnitzels and stir-fry cuts.”

Glenn Short of K.R. and J.C. Short Butchers, Narromine, said to date, he had absorbed price rises to shield his customers from expensive beef, but that would have to change.

However, he said customers hadn’t shied away from beef.

“People around here tend to be stable with their choices.”

Similarly, premium branded beef appears so far to be immune to price fluctuations.

Branded beef supplier Atron Enterprises business development manager Lauren Bakker said there had been no notable impact on the sale of its branded range through its retail stores in Brisbane and Sydney.

Mr Semmelroth said the already high retail prices are likely to rise even further in the coming months, driven by intense competition between domestic consumers and exporters.

“We can expect prices to go higher as we approach the new year as we’re going see a further decline in domestic beef production. We’ll also feel it the following year as production dwindles.”

Taste for lamb, at right price

STRONG beef prices are affecting the meat supply chain, as both restaurants and families change their shopping habits.

Matthew Papandrea (pictured) of Joe Papandrea Meats in Sydney's Wetherill Park, sells wholesale meat and runs two retail butchers shops.

He said beef prices had spiked - carcase weight beef currently cost him about $7, up from $4.70 in January.

"Everybody is feeling the pinch," Mr Papandrea said.

"A lot of families are shifting to lamb and even pork.

"I've had to buy a few more lamb carcases in because it's the same price as beef and people are thinking it's better value."

Restaurants have changed their orders too, he said.

"In the past few months they've been deleting products off their menu and finding an alternative," he said.

Taste for lamb at right price

STRONG beef prices are affecting the meat supply chain, as both restaurants and families change their shopping habits.

Matthew Papandrea (pictured) of Joe Papandrea Meats in Sydney's Wetherill Park, sells wholesale meat and runs two retail butchers shops.

He said beef prices had spiked - carcase weight beef currently cost him about $7, up from $4.70 in January.

"Everybody is feeling the pinch," Mr Papandrea said.

"A lot of families are shifting to lamb and even pork.

"I've had to buy a few more lamb carcases in because it's the same price as beef and people are thinking it's better value."

Restaurants have changed their orders too, he said.

"In the past few months they've been deleting products off their menu and finding an alternative," he said.