Domestic price of beef

IBISWorld expects the domestic price of beef to fall by 3.4% during 2023-24, to 168.0 index points. Beef and veal production has surged following successful herd rebuilding efforts after a prolonged drought. Drier weather conditions in some key beef cattle farming regions also encouraged increased turn-off rates. However, these were exacerbated by fears of an El Nino weather pattern setting in across the east coast, which did not eventuate.

The domestic price of beef has increased strongly over the past five years. Beef production has been volatile over the past five years, but has declined overall. Output was elevated across 2018-19 and 2019-20 as farmers sold down their herds to cut costs amid harsh drought conditions. Declining turn-off rates over the subsequent years led to record-high prices for feeder cattle over the two years through 2021-22, pushing up the domestic price of beef.

Demand for Australian beef in export markets has substantially over the past couple of decades, and now accounts for over half of production. Rising incomes among the middle class in many Asian nations, particularly China, have made high-quality agricultural products more affordable to this group of consumers. Given Australia's high-quality produce reputation, rising incomes have resulted in strong demand growth for Australian beef. In addition, the implementation of free trade agreements with China, Japan and South Korea, coupled with the weak Australian dollar, has improved the price competitiveness of domestic products in overseas markets, further boosting export demand for Australian beef.

A high volume of beef exports decreased beef supplies to the local market at the start of the period. This placed upward pressure on beef prices at the retail level. However, export volumes fell as a share of total production over the past three years. Pandemic restrictions in overseas markets like Japan weakened demand over the two years through 2021-22. Rising diplomatic tensions with Australia saw China place restrictions on imports of Australian beef in late 2019-20. Exports to the United States have fallen as drought-induced high turnoff rates have boosted domestic production there. Nevertheless, beef production in Australia has fallen during this time as farmers looked to rebuild their herds following a severe drought. This contributed to record saleyard prices and higher retail beef prices. Pandemic-related disruptions impacting meat processing and transport businesses also led to beef shortages feeding through to higher consumer prices. Overall, IBISWorld forecasts the domestic price of beef to increase at a compound annual rate of 5.5% over the five years through 2023-24.