Resilience of the lambs: review to flesh out meat pricing

Sheep and cattle values have plummeted while lamb and beef prices have budged only a little. The government wants to know why.

Sheep farmers on both sides of the continent face the prospect of drought and high stock numbers with prohibitively low sheep prices.

The relationship between low livestock values in saleyards and stubborn prices on supermarket shelves would be probed in the federal government’s upcoming competition review, under a proposal by the country’s agricultural ministers.

It comes as sheep farmers on both sides of the continent face the prospect of drought and high stock numbers with prohibitively low sheep prices.

As cattle and sheep numbers plateau after three years of sustained growth, prices at saleyards have dropped to almost half the price they were a year ago.

But the price of lamb on supermarket shelves has budged only slightly in comparison.

The issue was raised at a meeting of state and territory agriculture ministers last week, when they called for consideration of challenges facing farmers in the federal Treasury’s ongoing commonwealth competition review.

It would add to another federal government review, announced last week, into the Food and Grocery Code, aimed at improving the treatment of suppliers by wholesalers and retailers.

The ministers at the meeting acknowledged the deteriorating seasonal conditions facing much of the country’s food producers and expectations of a decreased winter crop harvest.

“Ministers noted that these conditions were contributing to sharply declining livestock prices impacting farming businesses, their families and regional communities,” a meeting communique said.

“Ministers encouraged the consideration in forthcoming commonwealth competition reviews of the impact of competition on commodity, food and grocery prices.”

Federal Agriculture Minister Murray Watt said the reviews would focus on whether farmers were being paid fairly for their produce.

Agriculture Minister Murray Watt. Picture: Lyndon Mechielsen

“We are seeing supply and demand pressures which are impacting sheep and cattle prices at the moment, partly due to slowing restocking demand and increasing turn-off,” Senator Watt said.

“While a more affordable lamb roast is appealing to relieve cost-of-living pressure, it’s important that producers are getting a fair price and that profits are getting passed on, which is why the Albanese government has announced a review into the Food and Grocery Code of Conduct.

“But importantly, supermarkets don’t have to wait until that review is finalised to do the right thing – our farmers deserve to make a living.”

Meat and Livestock Australia industry insights and strategy manager Scott Cameron said retail prices for beef and lamb had started to ease in the past 12 weeks, while consumption had increased.

Mr Cameron said the delay in retail prices dropping was usually caused by forward contracts and high fixed prices for input costs in the supply chain.

“Historically, it generally takes about eight months from the time there’s a significant movement at saleyard to actually filter its way through to retail,” he said.