Meat demands set to change

According to Meat & Livestock Australia, an economic slowdown gripping almost all developed economies will impact demand for red meat as consumers change consumption and spending patterns toward lower value products.

With the United States and Japan – two key export markets for Australian beef – expected to be the worst affected by the slowdown, demand for Australian meat likely will be affected, especially for higher value beef and lamb products, said the industry body.

Indeed, a slowdown in demand has already started, with the volume of manufacturing beef to Japan increasing and prices to Japan and the US rising as consumers shift down to lower valued meat products, MLA said in a statement.

In the first nine months of this year, manufacturing beef accounted for 35% of all exports to Japan, compared with 30% in the same period of 2007 and 28% in the year-earlier period.

“The majority of Australian beef exports to the US should benefit with manufacturing beef used in the cheaper fast food sector,” MLA said.

Typically, the vast bulk of Australian beef exported to the US is lean manufacturing product, which is blended with fattier US beef into hamburger patties.

“The negative impact of the slowdown is likely to be felt across the smaller, but growing (beef) cuts trade, along with demand for lamb,” the statement added.

In Australia, food service and retail tracking reports indicate a significant shift by consumers toward cheaper meat products.

Fast food outlets are the only foodservice segment to report an increase in beef usage in the 2008 first half, but lamb usage is down.

Australia is the world’s second biggest beef exporter after Brazil, with Australia’s other major beef export markets being South Korea and Russia – part of a total annual beef export trade worth almost $4.5 billion.

Australia also is a major global supplier of sheepmeat, chiefly to the Middle East.

Dow Jones Newswires

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