Still calling Australia home
With 33% of the beef and 51% of the lamb produced in Australia remaining on home soil, the domestic market is the single largest destination for Australian red meat.
Australia and 'red meat' go hand in hand. On average, Australians consume around 800g of beef and lamb each every week, comprising mainly of beef steak, mince, lamb chops and racks.
For beef, the season dictates when cuts are consumed. Barbecue cuts (sausages, prime steaks) are more popular in summer; slow-cooking cuts (casserole cuts and roasts) are more popular in winter.
Overall, beef sales are about 4% higher in winter. Demand for lamb is less seasonal, although there is increased consumption in spring and around Australia Day.
Red meat purchases
In the domestic market, most of our beef (69%) ends up in the retail sector, while 31% goes into foodservice, including industrial catering. The proportion of lamb that goes to retail is slightly higher at 72%.
More people visit supermarkets as the primary place for purchasing beef and lamb, with Coles and Woolworths accounting for about 60% of the retail sales of fresh meat. Butcher shops hold about 25% of the market.
In recent years retailers and the foodservice sector have had to contend with a deterioration in Australian consumer sentiment due to the subdued global economy, 'two-speed' Australian economy and rising living costs. With consumers tightening their purse strings, retailers have reduced beef and lamb prices to attract consumers to their store and encourage spending.
A competitive marketplace
One of beef and lamb's biggest competitors in the domestic market is chicken. Over the years chicken consumption has surpassed that of beef, as the price gap between chicken, beef and lamb has been increasing. From a 20% price premium for beef and 40% for lamb compared to chicken two years ago, the price differences have increased in 2012 to 35% and 60%, respectively.
However, chicken isn't the only competitor in the Australian market. Given Australia's export focus, the domestic market competes tug-o-war style with export demand for beef and lamb.
A decade ago nearly two-thirds of Australian lamb production remained in Australia. Now only half stays. This trend is expected to continue over the medium term.
The trend isn't as visible for beef, with the lion's share already diverted abroad. However, markets like the Middle East and Russia tend to seduce product away from the domestic market by outbidding prices paid by the domestic market.
Value share (fresh and frozen)
Of all fish and meats used by foodservice, beef and veal represent 29%, while lamb and mutton make up 6%. Poultry makes up 27% and pork 5%.
Source: Meat & Livestock Australia, 1 February 2013
