June 9, 2011

Australian beef market remains steady for June

Australia's beef market has seen steady to strong demand for beef across the retail sector during the first week of June.

The major supermarket chains, along with independent outlets indicated that sales have been robust, with some reporting that last week was their best sales results for many months.

Reports from butchers during the first week of June have been more mixed; continuing what has been a very difficult trading period for many businesses. While the change of weather can impact butchers sales performances, and consumer awareness has been heightened by the current live export debate, the primary impact on butchers patronage in recent months has been the sustained and highly publicised beef price discounting by the major supermarket chains.

Additionally, the slowdown in export demand throughout May, accentuated by the record high Australian dollar, has seen more beef being sold into the Australian market. For May, beef utilisation in the Australian market is estimated to have increased 9% on-year, with the estimated %age of beef production sold into the Australian market in May totalling 36%, up from 32% on both March and April.

With little prospects for improvement in beef export demand throughout June, the supply of beef available for the Australian market is expected to remain high. Many of the northern cattle affected by the ban fall outside of the specifications demanded by many of the major retailers in the Australian market, along with almost all affected cattle requiring further finishing before reaching suitable weights for slaughter.