The future of beef: Consumers could buy less, but pastoralists told not to worry

Consumers may choose to cut beef from their diets as cost pressures are predicted in 2023 and 2024, but one industry analyst is telling pastoralists not to worry. Rabobank’s senior animal proteins analysist Angus Gidley-Baird revealed his team’s two-year projection at the Kimberley Pilbara Cattlemen’s Association conference on Friday. While the analyst advised global economies could be expected to slow because of the influence of Russia’s invasion of Ukraine, Mr Gidley-Baird assured the pastoralists in the audience they did not have cause to panic. There might be various cost issues surrounding rising price of fuel, grain and fertiliser, however, it is the consumer that will receive the brunt of impact. “There’s going to be a slowing in the global economies and that could influence Australian consumers in terms of cost of goods coming into the country with impacts on the exchange rate,” Mr Gidley-Baird said. “It’s also going to drive what happens (in the cattle industry) with inflation and cost increasing pressures, and how the reserve bank responds to that. “All that is going to add to the cost of living for a consumer and what they take home at the end of the day in terms of their disposable income, the increased costs that they’re having to pay, and what that means they’ve got leftover to pay for food.” Mr Gidley-Baird said it was a question of what the consumer was willing to give up to relieve these cost pressures. “We’re hearing anecdotal evidence come back, principally through retailers and then, slowly, further up the supply chain — the processors and abattoirs that are selling to those retailers,” he said. “Some of those anecdotal comments coming through is that volumes are starting to be pared back a little bit in anticipation for that consumer to be a little bit more cost conscious in their purchasing.” However, Mr Gidley-Baird admitted this would not be an issue for the majority of Kimberley pastoralists. “For a lot of (Kimberley pastoralists), large parts of their market are overseas, so I think they are probably well-positioned to not be overly exposed,” he said. “If you’re in a trade that’s got a bigger weighting towards value in the supply chain, you’re probably going to see less movement, but the operations that are going for premium white tablecloth high-end steaks, they’re probably the ones that are going to feel it a little bit more.” While the threat may not be dire, he warned those in the industry not to be complacent and to keep a watchful eye on the consumer. “I think, from a producer point of view, you just got to be aware that we’re going to see a softening at that consumer end,” he said. “They’re going to start seeing downward pressure on those prices, which just means from their point of view, they don’t have much ability to influence those prices that they’re getting, but they can control their costs. “So to be able to accommodate prices that aren’t going to go up, you’ve just got to keep a much closer eye on your costs so you can manage your margins.”