Lamb barely chops into the weekly pay cheque

Lamb barely chops into the weekly pay cheque


Sheep
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Mecardo has crunched the numbers and found some interesting trends on lamb prices in relation to the average weekly wage.

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MANY years ago, a smart farmer mentioned to me how a sheep cost half a week’s wages in the 1950s.

He was thinking that meat prices (this is the early 1980s) were cheap compared to three decades ago. Stacking up the numbers to compare lamb value to average wages tells us he was right.

The value of a lamb (assumed to have a carcass weight of around 16kg prior then) accounted for 20-30 per cent of the weekly wage in the 1950s.

Sheep numbers rose through to the late 1960s, before falling in the 1970s, recovering again until 1990 and then trending lower.

The value of lamb in proportion to weekly wages falls through to the 1980s and then steadies, before starting to gradually recover in beyond 1990.

The value of lamb has risen from 4-5pc of a week’s wage in the 1980s to be close to 10pc now, which is on par with the early 1970s (Figure 1).

FIGURE 1: The saleyard value of a whole lamb (price by carcass weight), in annual terms from 1950 onwards as a proportion of the Australian average weekly wage.

FIGURE 1: The saleyard value of a whole lamb (price by carcass weight), in annual terms from 1950 onwards as a proportion of the Australian average weekly wage.

This is more in line with the perspective of a consumer and it shows the relative price of lamb has doubled since the mid-1990s in relation to wages.

Running the data for a shorter period, starting from 1972, we compared a kilogram of the retail price for lamb with average weekly wages (Figure 2).

FIGURE 2: 1 KG retail lamb value as a proportion of average weekly wage. While the retail price of 1 kg of lamb as a percentage of average weekly wages is lower than the 1970’s, it seems to be flatlining in recent years.

FIGURE 2: 1 KG retail lamb value as a proportion of average weekly wage. While the retail price of 1 kg of lamb as a percentage of average weekly wages is lower than the 1970’s, it seems to be flatlining in recent years.

It is somewhat surprising as it shows the retail lamb price to be flatlining in relation to the average wage, which is not how it seems in the butcher shop.

It shows that lamb is cheaper compared to the average wage than in the 1970s.

What does it mean?

Lamb (and its associated protein mutton) has become a lot cheaper in relation to average wages during the past seventy years.

The saleyard price for a lamb in the 1950s accounted for 25-30pc of the average weekly wage.

If we were to repeat that in 2018, the saleyard price would be close to $400 per lamb.

The falling trend in value seen from the 1950s through to the 1980s appears to have ended.

The trend now shows a gradual increase in value in relation to average wages, reflecting a fall in lamb production when viewed on an international scale.

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