THE Australian beef producers’ share of retail dollar spend on beef has moved a little higher over the past three months.
The recent release of March quarterly Consumer Price Index data from the Australian Bureau of Statistics provides the opportunity to update the quarterly producer share of retail dollar calculation (see details below) published jointly by analysts Episode3 and Beef Central.
As can be seen on the graphs above and below, in the first quarter of 2025 Australian cattle and lamb producers experienced modest improvements in saleyard prices, yet diverging retail trends and cost dynamics led to mixed outcomes in producer share of the retail dollar.
For cattle, saleyard prices rose from 669c/kg cwt in Q4 2024 to 703c/kg in Q1 2025, continuing the gradual recovery observed since the mid-point of 2024.
Retail beef prices also lifted, increasing from an average of $25.97/kg retail weight to $26.36/kg in the most recent quarter. This parallel movement in both upstream and downstream prices meant that the producer’s share of the retail beef value remained relatively stable, lifting marginally from 37.5 percent to 38.8pc.
This marks a partial recovery from the 35pc low recorded in mid-2024, suggesting more favourable market conditions for cattle producers in early 2025.
Back in December 2023, the beef producer share of retail $ dropped to its lowest point since the data-set began back in 1998, at just 25.8pc. That coincided with lower cattle prices, as the market faced a pessimistic weather forecast from BOM for the 2023-24 summer, and residual concerns over the prospect of a Lumpy Skin Disease incursion in Australia.
Further back in 2022-23 when cattle prices were at record levels, the producer share graphed above soared to record highs at almost 60pc.
The most recent retail share figure for beef continues to sit well below the long-term trend growth line, as indicated by the dotted line on the graph above.
Saleyards index Vs Retail Index
In the graph below comparing the saleyards cattle price index versus the retail price index (1998 providing the benchmark at 100 for both) the saleyard cattle index climbed from 383 to 402 during the March quarter, indicating stronger returns to producers. The retail cattle index also moved up from 264 to 268, maintaining the upward retail trend.
Overall, the start of 2025 brought signs of cautious optimism for cattle producers as both saleyard and retail prices strengthened, improving their share of the retail value. For lamb producers, however, early signals suggest a need to monitor downstream pricing behaviour more closely, as higher retail values are not currently matched by proportionate gains at the saleyard level.
Lamb producer share drops
In contrast with beef, lamb producers faced a slightly different scenario last quarter.
While the saleyard price fell marginally from 826c/kg cwt in December to 784c/kg in March, retail lamb prices lifted from an average of $19.06/kg retail weight to $19.27/kg. This decoupling led to a reduction in the producer share of the retail lamb value, declining from 61.9pc to 58.1pc.
Although still historically high, this retreat indicates that retail price increases are not fully translating back to farmgate returns, potentially due to margin expansion along the supply chain.
For lamb, the saleyard index versus retail index (1998 providing the benchmark at 100 for both) saw the saleyard dip slightly from 446 to 423, while the retail lamb index rose from 298 to 301.
Background to the producer share of retail prices calculation
In collaboration with analyst Matt Dalgleish from Episode 3, Beef Central in 2023 launched a new quarterly series looking at trends in the beef producer’s typical share of the retail consumer’s spend on beef products.
A similar analysis was compiled by MLA for four years, before being discontinued by the industry service delivery company back in 2016. The project was originally launched as a result of producer requests during the 2012 MLA annual general meeting.
Beef Central sought, and gained MLA’s support to resurrect the discontinued series, based on clear reader interest. The same formula is used to compile the new set of results as originally used by MLA (see explanation of the calculation below).
Episode 3 and Beef Central now jointly publish a quarterly report, soon after ABS quarterly retail beef price data is released.
The exercise sees national saleyard cattle prices in carcase weight terms being converted into an estimated retail weight equivalent and compared to average retail beef prices, as reported by ABS.
About the producer share of retail spend calculation
The beef producer share of the retail dollar is calculated using a range of assumptions:
- The national saleyard trade steer indicator is used as the benchmark livestock prices, representing animals suited for the domestic market. Livestock prices are collected by MLA’s NLRS.
- Converting the carcase weight price to an estimated retail weight equivalent price is achieved using a retail meat yield for beef of 68.7pc.
- The indicative retail meat prices are calculated by indexing forward actual average beef prices during each quarter, based on meat sub-group indices of the Consumer Price Index, provided by ABS. These indices are based on average retail prices of selected cuts (weighted by expenditure) in state capitals.
The producer share is calculated by dividing the estimated retail weight equivalent livestock price by the indicative retail price.
Click the links below to read earlier reports in this series, and Beef Central’s original story that led to the re-activation of this series:
December 2024
Should cattle producers be paying more attention to retail margin share?
HAVE YOUR SAY