April 23, 2007

Price premiums for MSA beef reduced

Price premiums for butchers selling MSA (Meat Standards Australia) beef in the first quarter of 2007 trimmed down compared with prices reported during the final quarter of 2006, according to data collected by Millward Brown's National Field Services.

The increase in the quantity of MSA graded product in the market, which rose by 10.5 percent from January to March 2007, was one of the contributors in reduced premiums. In addition, processors noted that the decline in prices paid for butt cuts and loins such as knuckles by the Korean market (due to high stocks, lower demand and US re-entry speculation) has negatively impacted MSA processors and product prices in the domestic market.

Over the three month reporting period (January-March), the wholesale price for MSA-graded carton sales was on average 5 percent higher than non-MSA carton sales. On yearling grainfed sales, the price charged for yearling cuts was 13 percent higher than the non-MSA equivalents and yearling grassfed prices were 20 percent higher than the non-MSA types. Over the past three months, the survey also revealed that 93 percent of wholesalers selling MSA beef thought the quality was "good to excellent".

Retail price charged for MSA-graded steaks also averaged 5 percent higher than non-MSA steaks - compared with a 10 percent premium over the October-December quarter. The MSA price premium also narrowed for cube rolls and butt fillets (to 10 percent and 8 percent, respectively), while no premium was registered for knuckles over the March quarter. In contrast, the premium for these cuts was 16 percent, 8 percent and 10 percent, respectively, during the December quarter 2006. The survey also revealed that 96 percent of butchers selling MSA beef thought the quality was "good to excellent"- 87 percent rated the quality of non-MSA beef as "good to excellent".