Beefed-up meat prices may push steak off the menu
Record cattle prices are threatening to push steak off the menu and take the sizzle out of beef sausages.
Some beef cuts have spiked by as much as 50 per cent in the past six months thanks to strong overseas buying – driven partly by the softening Australian dollar – and drought conditions.
The big price rises are putting the squeeze on margins in the meat processing industry and sparking warnings that shoppers need to get used to paying more for beef.
Butcher Peter Bouchier admitted it was very difficult to pass on the big cost increases to shoppers.
"There's just no cheap beef any more and it's the cheaper cuts that have probably taken the biggest rise, chuck, stewing steak and trimmings, which we use for sausage meat," he said.
Bouchier, who has several Melbourne outlets, warned some expensive cuts of beef could disappear from butchers and restaurant menus altogether.
The major retailers are also grappling with the big price hikes.
Market watchers suggest they can't absorb the big price rises for much longer before passing them onto customers.
Coles said the price rises in beef were great news for farmers but had forced the supermarket giant to "minimise" the impact for some of these increases.
"[However] for some beef products in our supermarket, …we have needed to increase prices to reflect the higher cost," a spokesman said.
Aldi also said rising prices were making it challenging to find cheaper cuts of beef.
"However, what we may see is consumers trying new cuts of meat like chicken or pork," a spokesman said.
Some retailers are understood to be increasing the minimum portion of popular products like mince to support sales volume.
It's understood Woolworths has not changed its mix of cuts or sizes.
However, it has invested heavily in keeping a lid on meat prices, grocery data released by Macquarie Securities shows.
The price index revealed no change in Woolworths' meat pricing compared with a 0.7 per cent increase in the price of meat at Coles.
It's not just the retailers that are grappling with the beef price hikes.
CWB The House of Quality Meat supplies product to the restaurant industry and holds major contracts with pubs and clubs.
Tarik Yalcin, who has worked at CWB for 16 years, warned the higher prices for steak and sausages were here to stay.
He said prices had increased more than 30 per cent in just six months.
He said it was hard to see what would bring them down given the ongoing overseas demand for Australian meat.
"Everything gets driven by the export prices," Yalcin said.
"We ring our suppliers on a daily basis to get chuck or silverside and one day they say it's $7 and the next it's $9.
"And they say 'take it or leave it' because if we don't want it, the export market does … this is the new normal."
The high cost of cattle is also hurting meat processors, which are cutting shifts and reducing production.
Two processors revealed they had cut production in response to the beef price spike, leaving one business operating just two days a week.
"These are hard times for everyone in the industry and it's hurting a lot of people," one processor said.
Where the lower dollar will hit
Cuts: Shoppers and diners should expect cheaper cuts to increase the most.
Sizing: It will become much harder to find smaller portions in your local retailer's fridge.
Snags: Beef price hikes will force butchers to shift to pork sausages to meet demand.
Restaurants: Prices are expected to climb and steak may be pushed off the menu.
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