Global demand and drought means red meat prices will rise even higher in South Australia

Red meat lovers grappling with the rising cost of shopping should not expect a reprieve anytime soon.

Butcher Trevor Hill from Bruce's Meats at Mitcham. Picture: AAP Image/Brenton Edwards

• Lamb roasts hit $50 as red meat prices soar
• Grocery bills to soar amid severe drought

Red meat lovers grappling with the rising cost of shopping should not expect a reprieve anytime soon, as strong global demand and drought drive prices up.

In Adelaide, a leg of lamb at the butchers is retailing for about $20 a kg, compared with about $14/kg a year ago, while loin chops are about $33/kg, compared with $27/kg.

Beef prices surged two years ago and there have been further rises in the past year, with T-bones and rump steak jumping to $32/kg and more than $26/kg respectively.

Australian Meat Industry Council SA chairman Trevor Hill, who also owns Bruce’s Meat butchers at Mitcham, said it was inevitable beef prices would again rise this year.

Farmers affected by the Queensland floods are expected to soon restore their properties and search for replacement stock, which could lessen supplies available for processing in SA.

Mr Hill said the jump in prices would mean some smaller butchery businesses would go to the wall, especially given increasing competition from larger supermarket chains.

He urged consumers to support butcher shops, given their vital role in the economy.

“Butchers are very nervous, because we feel price rises immediately, whereas the supermarkets only really feel it in a month or two,” he said.

“The biggest challenge for smaller, independent retail butchers is that margins are already tight and they’ve been tight for at least 12 months.”

Mr Hill said butchers were having to look at new ways of doing business, to ensure they were meeting consumers’ needs, particularly with a rise in veganism locally.

“Australia is the third largest red-meat consumer in the world but with veganism growing, I can see us going back to fourth or fifth,” he said. “What that means for butchers is that we have to find other ways of selling protein.

“I already have a number of people coming in, who might be buying meat for their partner, asking if there’s any meat-free options and I don’t have anything to offer them.”

To cater for that growing demand, Mr Hill recently employed a chef to offer meal solutions for his customers.

Rabobank senior animal proteins analyst Angus Gidley-Baird said that retail lamb prices nationally in the December quarter were 11 per cent up on the December 2017 quarter, with beef prices 2 per cent higher.

Mr Gidley-Baird said the rises happened despite a good supply of red meat flowing to processors across Australia in the past year, as many farmers had to offload stock, on the back of drought conditions in many parts of Australia.

“The shock will come when the seasonal does break, and farmers have some grass and are out there looking to restock,” he said. “That’s when we’ll see prices jump.”