Domestic price of meat

IBISWorld forecasts the domestic price of meat to drop by 10.1% during 2023-24, to reach 156.6 index points. Saleyard prices for cattle and sheep have plunged from record highs experienced in recent years. Cattle and sheep farmers increased turnoff rates (i.e. the number of livestock sent to abattoirs) following successful herd and flock rebuilding efforts in the wake of the most recent drought. The sharp increase in supply has driven down domestic lamb and beef prices. Pig meat and chicken meat production are also rising, placing further downward pressure on prices.

Domestic meat prices have grown strongly over the past five years. Rising incomes in key export markets throughout Asia and the Middle East have improved the purchasing power of consumers in these markets. This has enabled foreign consumers to purchase higher value, premium meats. Australia's high standards of production and strict quarantine laws mean that Australian agricultural products, like beef and lamb, are generally viewed as high-value goods in export markets. As a result, increasing demand for premium meats has boded well for Australian meat producers. The depreciating Australian dollar over the period has supported demand in export markets, as the low dollar makes exported meats more affordable for overseas consumers. However, demand for Australian meat, especially beef, has declined in the key export market of China over the three years through 2022-23. Rising diplomatic tensions between the two nations saw China ban the import of beef from a number of Australian abattoirs in May 2020. Pandemic lockdowns and the associated economic impact also affected demand for Australian beef and mutton in export markets. Demand has recovered somewhat in 2023-24, but has been tempered by global inflationary pressures. As a result, the volume of meat exports has declined as a share of production over the past five years.

Mounting demand for Australian meat in export markets saw Australian meat producers increasingly divert meat supplies to export markets in an attempt to increase earnings at the start of the period. This reduced meat supplies available to the local market, placing upward pressure on local prices. Meat processors faced significant disruptions with COVID-19 outbreaks leading to labour shortages and even the shutdown of processing facilities. This constrained overall production during 2020-21 and 2021-22, placing upward pressure on meat prices. Fluctuating beef cattle herd and sheep flock numbers have also affected supplies to local and overseas markets, which have impacted prices. Overall, IBISWorld forecasts the domestic price of meat to increase at a compound annual rate of 3.5% over the five years through 2023-24.