Global economic slowdown to affect meat demand

The economic slowdown that is gripping almost all western economies is set to have a significant impact on meat demand, as consumers alter their consumption and spending patterns, according to Meat & Livestock Australia.

With the US and Japan expected to be the worst affected by the slowdown, demand for Australian red meat is likely to be impacted, especially for higher value beef and lamb products, it said.

The impact of the slowdown on demand has already commenced, with an increased volume of manufacturing beef sent to Japan and stronger prices for this product to Japan and the US, as consumers trade down to lower valued products.

In the first nine months of 2008, Australian manufacturing beef exports to Japan are up 14 percent, making up 35 percent of total exports, compared to 30 percent and 28 percent in 2007 and 2006, respectively.

The majority of Australian beef exports to the US should benefit, with manufacturing beef used in the cheaper fast food sector.

Domestically, food service and retail tracking reports have also indicated a significant shift by consumers towards cheaper meat products. With fast food outlets as the only food service segment to report an increase in beef usage during the first half of the year.