Roughly, 68% of beef used domestically is sold through retail, 27% through foodservice and 5% in processing. Around 89% of lamb is sold through retail outlets, and 11% through foodservice. Almost all mutton is used in processing.
Demand for both beef and lamb has remained resilient in recent years, despite the sharp rise in retail prices. In 2005, average retail beef prices were 53% above 1998 values while lamb retail prices were 71% above 1998 values.
An indicator of this resilient demand is Meat and Livestock Australia’s (MLA’s) demand index for beef and lamb. Despite a decline in the 1980s and early 1990s, demand for beef stabilised in the late 1990s, and has remained strong in recent years. In 2005, the beef demand index was 14 points above 1998 levels. Similarly, despite a sharp decline in lamb demand in the 1980s and early 1990s, demand for lamb has recovered strongly since the late 1990s. Lamb demand has been particularly resilient in recent years, despite being the meat with the largest price rises since 1998. In 2005, the lamb demand index was 21 points above 1998 levels.
Furthermore, consumer expenditure for both beef and lamb has increased substantially over the same period. Beef expenditure in 2005 is estimated to have been A$6.2 billion, up 56% on 1998. Similarly in 2005 lamb expenditure reached A$1.7 billion, 65% above 1998 values.
This trend is also demonstrated through the fact that per person usage domestically has fallen at a slower rate than the rise in retail prices, with beef usage totalling 719,000 tonnes in 2005 (or 35.4kg/head) compared with 706,000 tonnes in 1998 (or 37.7kg/head) and lamb usage at 211,000 tonnes in 2005 (or 10.5kg/head) compared with 213,000 tonnes in 1998 (or 11.4kg/head).
Better beef and lamb quality, following growth in the grain finishing of cattle, beef grading through Meat Standards Australia, the development of a specialist prime lamb industry, improved product presentation and marketing, a general lift in the health image of red meat, and a strong economy, have all contributed to this trend.
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