Retail beef price continues to edge higher
01 November 2016
After taking a breather in the June quarter, retail beef prices edged higher in the three months ending September, partly due to pressure from record breaking cattle prices. Calculated using Australian Bureau of Statistics Consumer Price Index data, indicative retail beef prices averaged $19.34/kg retail weight (rwt) in the September quarter – up 19¢/kg rwt on the previous quarter and $1.58/kg rwt above this time last year.
- Indicative retail lamb prices averaged $14.83/kg rwt, up $1.11/kg rwt from last year but still slightly below the 2011 peak
- Indicative chicken averaged $5.30/kg rwt, back 19¢/kg year-on-year
- Indicative pork averaged $11.86/kg rwt, up 9¢/kg rwt
Cheaper pork and chicken prices continue to place competitive pressure on red meat. So far this year, indicative retail beef and lamb prices have averaged a multiple of 3.6 and 2.7 times the prices of chicken, respectively – above the pre-2016 ten-year average of 3.0 and 2.4.
Placing pressure on retail beef has been the record breaking run of cattle prices throughout 2016 – albeit they have eased off since the end of the September quarter. Through saleyards across the country, the national trade steer indicator averaged 681¢/kg cwt in the September quarter, up 16% year-on-year. It should be noted that, while over-the-hook prices did lift over this same period, they did not reach the same peaks as saleyard cattle which found additional support from restocker demand. The surge in cattle prices, however, has outpaced the increase at the retail level, and the beef producer share of the retail dollar exceeded 50% for the first time on records going back to 1998, averaging 51.25% in the September quarter.
With the national saleyard trade lamb indicator averaging 603¢/kg cwt in the September quarter, the lamb producer share averaged 58.13%, back slightly from the 59.67% recorded this time last year but still well above the pre-2016 ten-year average of 48.84%.
Historical retail prices and the producer share of the retail dollar can be downloaded from MLA’s public statistics database - http://statistics.mla.com.au/.
What are the producer shares of the retail dollar and how are they calculated?
- The beef and lamb producer shares of the retail dollar are calculated using a range of assumptions. The national saleyard trade steer and trade lamb indicators are used as the benchmark livestock prices, representing animals suited for the domestic market. Livestock prices are collected by Meat and Livestock Australia (MLA). Converting the carcase weight (cwt) price to an estimated retail weight (rwt) equivalent price is achieved using a retail meat yield for beef and lamb of 68.7% and 70%, respectively.
- The indicative retail meat prices are calculated by indexing forward actual average beef and lamb prices during December quarter 1973, based on meat subgroup indices of the Consumer Price Index (CPI), provided by the Australian Bureau of Statistics (ABS). These indices are based on average retail prices of selected cuts (weighted by expenditure) in state capitals. The retail price calculation has principally been made by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES); however, in some instances, the most recent calculation has been made by MLA.
- The producer share is calculated by dividing the estimated retail weight equivalent livestock price by the indicative retail price.
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