Global Crunch Takes a Bite at Meat Demand

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 says Meat and Livestock Australia.

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%, making up 35% of total exports, compared to 30% and 28% 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. The negative impact of the slowdown is likely to be felt across the smaller, but growing, cuts trade, along with demand for lamb.

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

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