The latest quarterly Consumer Price Index (CPI) figures were released last week, and apart from denying us all an interest rate cut, they revealed that red meat prices reached new record highs at retail level.
As part of its quarterly CPI release, the Australian Bureau of Statistics (ABS) calculates changes in the price of various foods at retail level. The data includes figures for beef and veal, lamb and goat, pork and chicken. If you’re keen, you can dive into the data and look at figures for lots of food types and each capital city.
Figure 1 shows the inflation data for major meat categories for the last 15 years. Beef and lamb reached new highs in terms of their retail price index relative to the start of 2010. Beef is at 176.8, marginally higher than the peaks of 2022. Lamb is at 142.5, which is 4 points higher than its 2022 peak.
Beef and lamb show plenty of volatility in price at retail level, although it pales in comparison to volatility at the saleyards. Lamb saw a very strong dip in 2024, which was the confluence of weaker export demand, strong lamb supply, and the fact a larger proportion of lamb is sold at domestic level than beef.
Pork and chicken prices are far more stable than their red meat protein substitutes. With pork and chicken being more intensive systems, supply is nowhere near as variable as the pasture-based beef and lamb industries. Chicken prices have risen only 24% in 15 years, and it’s little wonder they keep taking market share from the more expensive red meat counterparts.
Figure 2 shows the annual change in beef at retail level, compared to cattle at saleyards and the CPI. The stickiness of retail prices is good and bad for cattle producers. In a cattle price downturn, beef prices fall slowly, and as such, local consumption doesn’t increase to cater for the extra supply.
In reality, any increase in local consumption due to lower retail prices would have minimal impact on saleyard prices. The fact that retail beef prices didn’t fall in the downturn means that retailers are able to absorb more of the recent price rises, and we don’t see a price shock at retail level.
What does it mean?
US beef producers and packers are currently feeling the heat from retail beef price shocks. President Trump says he is going to bring prices down, but it will be difficult with record low supplies and tariffs on major importers adding to the price inflation.
While our beef markets are driven by export markets, it’s positive to see retail beef prices at record levels without much pushback from consumers.
Key Points
- Retail beef and lamb prices reached record levels in the September quarter.
- Strong export demand is driving beef prices higher at retail and saleyard level.
- Unlike the US, record retail beef prices domestically are seeing little consumer pushback.
Click on figure to expand
Click on figure to expand
Data sources: MLA, ABS, Mecardo
