THE Australian beef producer’s share of retail greenback spend on beef has tracked sideways, after hitting all-time historic lows again within the December quarter.
The current launch of June 2024 quarterly Client Value Index information from the Australian Bureau of Statistics offers the chance to replace the quarterly producer share of retail greenback calculation (see particulars under) printed collectively by Episode3 and Beef Central.
As may be seen on the graph above, the current restoration in saleyard cattle costs through the second quarter has helped preserve retail beef market share for producers, at the moment sitting at 35 % for the second quarter, down marginally from 35.2pc within the March quarter, as a result of sideways actions for each saleyard and retail beef costs.
March was the very best outcome seen for producer share because the second quarter of 2023, however a good distance off the long-term development line progress seen because the late Nineties.
Again in December the meat producer share of retail $ dropped to its lowest level because the data-set started again in 1998, at simply 25.8pc. Again in 2022-23 when cattle costs approached report ranges, the producer share index soared to virtually 60pc.
Within the graph above evaluating the saleyards cattle worth index versus the retail worth index (1998 offering the benchmark at 100 for each), the saleyard index was little modified within the June quarter, having lifted 30pc between December and March from 271 to 352. Retail beef costs mirrored the sideways motion seen on the saleyard with the index growing by simply 1 level over the June quarter from 258 to 259.
Background to the producer share of retail costs calculation
In collaboration with analyst Matt Dalgleish from Episode 3, Beef Central final 12 months launched a brand new quarterly collection taking a look at developments within the beef producer’s typical share of the retail client’s spend on beef merchandise.
The same evaluation was compiled by MLA for 4 years, earlier than being discontinued by the business service supply firm again in December 2016. The undertaking was initially launched on account of producer requests through the 2012 MLA annual normal assembly.
Beef Central sought, and gained MLA’s blessing to resurrect the discontinued collection, primarily based on clear reader curiosity. The identical method is used to compile the brand new set of outcomes as initially utilized by MLA (see clarification of the calculation under).
Episode 3 and Beef Central now collectively publish a quarterly report, quickly after ABS quarterly retail beef worth information is launched.
The train sees nationwide saleyard cattle costs in carcase weight phrases being transformed into an estimated retail weight equal and in comparison with common retail beef costs, as reported by ABS .
Concerning the producer share of retail spend calculation
The meat producer share of the retail greenback is calculated utilizing a spread of assumptions:
- The nationwide saleyard commerce steer indicator is used because the benchmark livestock costs, representing animals fitted to the home market. Livestock costs are collected by MLA’s NLRS.
- Changing the carcase weight worth to an estimated retail weight equal worth is achieved utilizing a retail meat yield for beef of 68.7pc.
- The indicative retail meat costs are calculated by indexing ahead precise common beef costs throughout every quarter, primarily based on meat sub-group indices of the Client Value Index, supplied by ABS. These indices are primarily based on common retail costs of chosen cuts (weighted by expenditure) in state capitals.
The producer share is calculated by dividing the estimated retail weight equal livestock worth by the indicative retail worth.
Click on the hyperlinks under to learn earlier experiences on this collection:
March quarter 2024
Should cattle producers be paying more attention to retail margin share?
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