SA cattle prices drop almost 40 per cent in past year, but rising costs keep eating into shoppers’ budgets

The price of South Australian cattle has dropped almost 40 per cent in the past year, but the savings won’t be passed on to shoppers.

The price of South Australian beef has plummeted almost 40 per cent in the past 12 months, but shoppers won’t see the cost of their steak drop, with retailers feeling the pinch of rising cost of living.

According to Elders livestock price data, the cost of a 300kg to 400kg steer in South Australia has dropped 39 per cent in the past year, including 22 per cent in the past month, to $3.34 per kilogram.

Elders livestock manager Laryn Gogel said the sudden drop had been caused by high supply and low demand after several strong years on the back of drought.

He said the market has spiked to an unrealistic high in the past three to five years.

“We probably didn’t assume as abruptly and as significantly as it had, but that was driven by a lot of things going on,” he said.

“Traditionally we wouldn’t see the fall as great, but in this scenario when we’ve come off an extreme high, we’re watching it depreciate that 30 to 40 per cent.

Mr Gogel said he expected the price to increase again due to an increase in global demand for Australian beef.

Tony O'Connell from O'Connell & Sons Market Meat Picture: Keryn Stevens

O’Connell’s Meats owner Tony O’Connell said despite the cheaper beef price, it wasn’t possible to pass the savings on to customers due to the increased costs of power, rent, packaging and transport.

Mr O’Connell said in the past 18 months the cost of packaging his products had increased

“It’s not anything to do with the meat prices,” he said.

“It hasn’t made any difference.”

Mr O’Connell expected prices to increase again in summer as demand for nicer cuts of meat increased.

Cattle Farmer Nick Simpson, with some cattle on his farm in Bugle Ranges, South Australia, The Advertiser/ Morgan Sette

Bugle Ranges farmer Nick Simpson, whose family has farmed on the Fleurieu Peninsula, for four generations, said primary producers are being “squeezed” by the lagging market.

“We are price takers, not price setters,” Mr Simpson said.

“We’ve gone form record highs to the other end of the scale where we can’t cover production costs.”

On top of low prices, Mr Simpson’s operational expenses have increased, with his spend on fertiliser doubling and his $250,000 irrigation system sitting unused.

“As farmers we’ve all been asking what’s been going on.”

Mr Simpson said the fluctuation in beef prices was “something that’s been happening for generations”, but had still hit his business hard.

“We’ve been impacted greatly by the drop in price,” he said.

“We’re really getting squeezed on the prices.

“We’re getting squeezed in a number of ways.”

Mr Simpson said it was not just primary producers suffering.

“I’m very much aware of what’s happening to consumers as well,” he said.