Major retailers and producers on red meat prices at store sales, and on the shelf

Prices across Victorian store cattle sales throughout 2023 have dropped below 200 cents a kilogram for lighter-weight cattle, and have recently started returning to more than 250-300c/kg.

Meanwhile, the national mutton indicator and the national trade lamb indicator reached a disparity of 484c/kg.

Meat & Livestock Australia stated this was the second largest nominal price difference on current records.

The MLA cited volatility and a rapid decline in its recent sheep and lamb market review, with indicators dropping between 40 and 70pc from the beginning of 2023 to October, "lifting rapidly" across the past six weeks.

Lamb fattener and grains grower Bruce Macague, Rochester, said they were down about a dollar a kilo more than he'd prefer, and forward sold about 90 per cent of what they had on-hand after his stock agent's advice.

"We aim to be destocked by about August, and we aim to sell most of the lambs into the price peaks in January and through the winter," he said.

"The prices this year, we were expecting to contract lambs through the autumn, we're down about a dollar a kilo more than I'd like.

"I was expecting the cycle would come back down at some stage, I didn't think it would be as sharp as it was.

"It's moving back up again now."

He said he believed part of the reason for disparity between saleyards prices and supermarket, end-product retail prices, were due to processors pre-purchasing meat at a "much higher price" and working through backlog.

"Despite the lack of confidence for lambs at sales, we've already bought about 600 lambs as part of our program so we're keeping our confidence that it will turn around," he said.

"We'll keep doing our normal numbers, on our cropping side of things we've increased the amount of legumes we're growing so there'll be more feed in those stubbles after harvest.

"Hopefully we won't have to do as much feedlotting over summer, and hopefully the price of grain stays high."

He said they had a "fantastic" hay season with no rain on the hay.

"Because of the dry spring, it makes extensive stress to the oats, hays and cereals and makes high-quality, high-sugar hay so it's some of the best quality hay we've ever had," he said.

He said there was a definite hit to confidence following the live export ban, particularly affecting Western Australia.

"There's no real export market for red meat from live export from the east coast," Mr Macague said.

"But that lack of confidence out of Western Australia certainly hurt the market in Victoria, certainly, can't say it didn't."

Two major supermarket chains, Woolworths and Coles, confirmed to Stock & Land they purchase most carcases directly from producers and feedlotters.

Coles purchase at least 95pc of their beef products directly, and Woolworths source wholly directly from producers.

Woolworths contracts its cattle between three and four months in advance.

A Woolworths spokesperson said there wasn't a "single cattle farmer we buy from" who received prices as low as 200 cents a kilogram.

"We're currently paying our long-term suppliers more than the industry market indicator for beef, which has increased by more than 40 per cent in the last two months," the spokesperson said.

They said cattle markets were prone to move sharply over short time periods, and they partnered directly with farmers and feedlots instead of purchasing from saleyards.

"To offer greater price certainty for both customers and suppliers, we partner directly with farmers and feedlots to agree on fair prices that reflect the high quality of their livestock and market dynamics," the spokesperson said.

"We will continue to work with our long-term beef farmers to forward contract our supply into 2024 to ensure they have confidence over the drier periods."

Woolworths declined to confirm an average price for purchasing cattle, but confirmed it was above the Eastern States Young Cattle Indicator.

However, examples of cost decreases in-store included corned silverside, lowering by 16pc, diced beef by 13pc, and beef mince down by 10pc in the past 12 months, and 20pc off all standard lamb cuts.

A Coles spokesperson said they were aware cost of living "front of mind" for consumers and they were committed to providing meat at lower prices.

They said they recently reduced lamb prices with savings between 20 per cent and 36pc, with some beef products on discounts of more than 10pc.

The spokesperson said lamb midloin chops in Victoria, Queensland and Tasmania were at $18 a kilogram, down from $22/kg.

"The retail price of meat is not determined by the market price of livestock alone," the spokesperson said.

"While livestock prices have gone down, other costs in the supply chain have gone up, including transport, processing, packaging, and retailing the product on shelves.

"Most of our meat is sourced directly more than 2500 Aussie beef and lamb producers, rather than at the saleyard.

"Therefore, industry market indicators do not reflect the price Coles pays for beef and lamb."

Both major retailers cited reasons for cost increases, including export market demand, feed costs, primary processing, secondary manufacturing, and supply chain logistics.