IT’S been a generally tough year for the Australian domestic beef wholesale trade, but the run through to summer grilling season and the Christmas period that lies ahead is showing some positive signs, domestic wholesalers have told Beef Central.

“There’s been a real margin squeeze on the meat wholesale sector for large parts of this year, and on top of that, the cost to operate has gone up exponentially,” a large wholesaler with a network across the eastern and southern states said.

Shipping boxed meat around the country had become ‘very expensive’ with one operator suggesting a, interstate (say, Melbourne-Brisbane) transfer that might have cost $400 a pallet was now often $600 due to fuel prices – representing an additional cost of 30c/kg.

“Whether you’re operating your own truck fleet or outsourcing, shifting product interstate has just go so expensive,” the contact said.

Consumer caution

At the same time, domestic consumers have continued to show a cautionary approach to buying red meat at relatively expensive prices.

The series of interest rate rises and a generally sober mood among consumers over discretionary spending has weighed heavily on Australian consumers, and red meat at close to historically high prices has not helped.

While there had been some shift out of muscle meat into trimmings and cheaper red meat items, good primals had held reasonably firm through 2026, the trade source said.

“I’ve been really surprised – through the winter when grilling cuts are typically very hard to sell, they held pretty firm this year.

“Trimmings came under some price pressure, especially with the impact of the China tariff from mid-year, but they’re still expensive, historically. The China trade impact added an additional hiccup, but wholesale prices in the past week or two are definitely firming. That’s at least partly due to China re-entering the market for deliveries from January, and the Asian markets generally have picked up, in addition to the strong underlying volumes into the US.”

“There’s definitely less meat in cold storage now than what there was earlier, looking for a home.

“Weekly slaughter numbers in southern states remain under some pressure, with some operators still only processing four day weeks. That means there’s generally less meat in the system, and wholesalers are generally a lot more current in terms of stocks than they were three or four months ago.”

The contact said all domestic wholesalers were now very conscious about “keeping our chilled meat moving,” rather than “letting it get too much date on it, because you cop a discount on the product when it gets too much age on it.”

“Your first loss is always your best loss in these situations, and a number of operators have learned that lesson this year,” he said.

One or two very large export processors took a big dive into the domestic market with meat that was backing-up, and took a big hit on price – but that is now moving through the system.”

Home consumption trend returning

The wholesaler said there was a distinct trend this year on the domestic market for consumers to revert to home entertaining using a nice piece of beef, rather than the more expensive option of dining out so much.

“It’s a little like the experience seen strongly in 2021 during COVID. Luckily for us, like most wholesalers, we’ve seen a simple exchange from food service customers to retail customers, without impacting the overall volume of beef sold too much.”

“The typical consumer still wants to eat well, but if they’re watching their finances, they’re buying a nice cube roll from their butcher, and sticking it in their smoker they got last Christmas, or their Webber. And the bottle of wine from the bottle shop costs $25, not $80 or $100 on the wine list.”

Asked how the trading run through to Christmas looked, he said, “I honestly think we will trade pretty well – despite the headwinds.”

“We’ve had reasonably strong sales, despite the fact that the traditional purchasing stock-up for Christmas has not yet started – it still three or four weeks away.”

“We’ve been quietly surprised how volumes have kept moving, despite the underlying economic climate. But there’s consumer pressure on, and there will be no record wholesale prices – people start to push back.

“Last financial year (ended 30 June) was a bad year for bad debts from the retail sector, which knocked a few wholesalers about, but good butchers seem to be trading reasonably well this spring, despite being under pressure. Food service wholesalers might see it a little differently.”

As always, the ‘danger period’ for red meat sales would be January-February, as consumers got back to work, ate their way through Christmas hams and turkeys and had school fees and holiday bills to pay.

Currently, knuckles and topsides were selling quite well in the wholesale market, but understandably, chucks and blades (typically slow-cook winter-type items) have come off the boil a little in recent times as conditions warm up.

“Cubes, strips, shortloins and rumps are showing some pick-up in demand,” the wholesaler said. “There’s a bit of stock around, so they haven’t gone silly-expensive yet, but the processors are now fairly bullish about their pricing, heading into November-December. And the fact that southern plants have been operating at reduced levels has impacted supply of that lighter domestic type meat, also.

Cheap pork prices (pigs are back $1/kg in the past nine months) had made the price gap between red and white meats look even more extreme.

“Everybody is saying the same thing: the price of slaughter cows are ridiculous, and its forcing manufacturing meat prices to stay at higher levels, to try to avoid big processor losses.

Domestic trimmings prices are still closely influenced by international demand into markets like the US, where the beef herd remains at 70-year lows.

Trimmings, which represent around 30pc of the overall carcase value, were having a significant effect on total carcase return, another wholesale source said.

“Domestic trimmings are currently trading more than $1/kg below where they were a few months ago,” he said. That comes straight off the bottom line.”

Export trimmings that were trading close to (and even above) $12/kg some months ago are now a around $10/kg (90CL) and $9-$9.50/kg (85CL) on the domestic market, due in part to strong export competition out of Brazil. But that’s probably $1/kg more than the market three weeks ago, as China comes back to life.

“And there is this underlying domestic consumer demand for mince, as a cheaper, versatile red meat option during tight financial periods,” the trade source said.

In the muscle meat category, prices on good quality striploins and cube rolls on that got down as low as $17/kg at wholesale earlier are now starting to recover, to the $21-$22/kg range, with better shortfed examples now back closer to $23-$24/kg.

Rumps have gone from $14-$15/kg to $17/kg or higher for good grainfed steer with some marbling – not quite at levels seen this time last year, but better than a few months ago when export demand was flatter in the absence of China. Rumps are currently very short in the wholesale market- partly because rump as a slightly cheaper grilling option are now the go-to ‘special’ in many retail chilled cabinets.

Despite the shipping challenges, the Middle East has been operating strongly on middle cuts, with airfreight substituting sea freight in some instances..

However wholesalers remain wary about further cost of living impacts, on top of already record high fuel prices, and how they might impact domestic beef demand and price between now and Christmas.

“Another interest rate rise before Christmas could really undermine consumer confidence, if it happens.”

“Summer grilling season for red meat is certainly not as predictable as it once was,” one contact said.