Meat price drop amid rising turn-off rates and cost-of-living

Coles has dropped and locked beef prices with the prospect of increased livestock turn-off following a period of herd and flock rebuilding.

Cheaper beef is on the menu for shoppers at Coles for the next few months, after Coles became the first major retailer to lower beef prices.

But with cattle prices coming down from the record highs seen last year, retailers are arguably passing on what is the true cost of products to consumers, according to industry experts.

The supermarket giant this week sliced the price of select beef products, including mince and diced varieties, from between 7.7 per cent and 15.4 per cent until at least July 4.

AMIC industry affairs general manager Tim Ryan said the shift was occurring with the prospect of increased livestock turn-off following a period of herd and flock rebuild.

“Producers have experienced a run of elevated livestock prices in recent years due to a string of good seasons and reduced supply,” Mr Ryan said.

“However, markets have eased back towards the five-year average. This has eased price pressures downstream, but supply chain challenges and other costs will limit how much can be passed onto consumers.

“High energy prices, particularly natural gas, as well as shortages of CO2 used in a range of applications, such as packaging, are increasing the cost of meat processing and disrupting product lines.”

The benchmark Eastern Young Cattle Indicator closed at 679.9 cents a kilogram on Wednesday, 4.5c/kg lower compared to the previous week and 405.3c/kg lower than at the same time last year.

Cattle Council chair David Foote said the cattle market in Australia had dropped in price “well before the Coles initiative”, by an estimated 25 to 30 per cent.

“I imagine the retailers are passing on the true cost of the product,” Mr Foote said.

Mr Foote said while cost of living pressures continued to affect Australians, red meat would always have a place on the dining table.

“Historically, what has changed is the cuts of meat purchased will come down from the fillet and down to the oyster blade. But beef is still a significant part of the family diet.”

Supermarket beef prices drop with the prospect of increased livestock turn-off following a period of herd and flock rebuild. Picture: Supplied

Coles CEO Steven Cain said customers were looking for cheaper cuts of meat as the economy tightened, “which is why we have focused on beef mince which is our number one line.”

Meanwhile, rain has delivered a much-needed shot of confidence into cattle sales with hopes the market may have finally bottomed out.

The EYCI has gained 20c/kg in the past week, and store markets have also shown lifts of up to $100 for steers. The benchmark hit its lowest level in late March when it dipped to 667c/kg but has risen slowly since then.