INCREASED volumes of beef on the domestic market as export demand has cooled, have delivered the first drop in retail prices in four years.
Combined with a bright outlook for premium beef being painted by consumer insight research, the scene is set for exciting times for what has always been one of Australian beef’s most attractive markets.
Forecasts are even pointing to a slight turnaround in the long-term trend of declining per capita consumption of beef in Australia.
Meat and Livestock Australia (MLA) data shows domestic beef use accounts for 30 per cent of available production.
This time last year, it sat at 25pc, where it had been for the previous five years.
Indicative retail prices, provided by the Australian Bureau of Statistics, show the first quarter of this year saw the first easing since 2013, although they are still at historically high levels.
MLA chief marketing and communications officer Lisa Sharp said the domestic market had always represented one of the highest value markets for beef.
“It continues to offer relative premiums alongside less complexity and risk due to the length of the supply chain,” she said.
The upward slope of retail beef prices since 2013, which has run in sync with cattle prices for the past two years, has been driven by red hot demand in overseas markets.
“The United States, a major competitor was constrained in its ability to supply during this time,” Ms Sharp said.
“That situation has changed and the global environment has become more competitive – particularly in markets such as Japan and Korea which are attractive to Australian and US beef exporters.”
As beef retail prices continued their upward climb in Australia, the average spend of consumers remained steady at $330 per person per year in 2016 and 2015.
“Same frequency, smaller portions is how people managed the budget,” she said.
That fact gives weight to the argument Australian consumers place a high value on having beef on the menu regularly.
Ms Sharp said research conducted by MLA showed beef was still in 85pc of households on any week.
Further research indicated 49pc of all consumers described themselves as a foodie.
“That’s nearly half the consumer base that are open to new cuts and cooking methods and a demographic that tends to be higher in income and is showing more information seeking activity,” she said.
The big question is whether per capita consumption will increase as supply in Australia starts to normalise.
Australian Bureau of Agricultural and Resource Economics and Sciences reports per capita consumption of beef in Australia was 27.1 kilograms in 2015 and 25.4kg last year.
“ABARES has forecast a small increase in consumption from per capita consumption in 2017 and 2018, counter to the long-term trend in Australia and other OEDC nations.
“However, that is an economic equation and has to be overlaid with many other factors, including what sort of competitive intensity will develop at the retail level, the price of other proteins and of course consumer preferences.”