![MLA managing director Jason Strong, Angus Australian chief executive officer Scott Wright and president Erica Halliday and producer Sam White, Bald Blair Angus at Guyra, at last week's Angus National Conference in Tamworth. MLA managing director Jason Strong, Angus Australian chief executive officer Scott Wright and president Erica Halliday and producer Sam White, Bald Blair Angus at Guyra, at last week's Angus National Conference in Tamworth.](/images/transform/v1/crop/frm/38U3JBx5nNussShT8aZyYjc/9e3f79d5-0572-4be1-9396-b5083e0214ab.JPG/r200_307_5347_3894_w1200_h678_fmax.jpg)
The period of time Australia has recently spent wearing the crown of having the most expensive cattle in the world may have been delightful for the producer but it did elicit concerns.
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So too the very large hike in retail beef prices we've experienced over the past two decades.
Questions have been constant around the longer term viability of an industry raking in such phenomenal price rises.
But the message from the boss of the red meat industry's most influential organisation, Meat & Livestock Australia, is that neither are a bad thing.
In a nutshell, there is growing demand for Australian beef and people who will pay for the quality we are producing, Jason Strong says.
We should be asking a high price.
Speaking at the 2023 Angus National Conference in Tamworth last week, Mr Strong said while Australia had slipped back to sitting just behind the United States in terms of the relative cost of cattle, prices were still significantly higher than they have been historically.
Three years ago, when the cattle market spiked like never before seen, producer returns were 3 per cent above what US cattlemen were receiving as as much as 75pc above the Brazilians.
Yet there was nothing risky about those lofty peaks because for the first time ever, the amount of money in the supply chain was enough for all to do well, according to Mr Strong.
A producer himself, he said three years ago his family sold crossbred feeder steers for $2250 - 'the most money we could ever have imagined for a grassfed steer.'
Processors at the time were talking about losing $300 a head.
"Keep in mind we need processors. If we don't have them we're all just running really cool zoos," Mr Strong said.
"But think of it like this. If we gave up that $300 the processor needs, and even another $100 so they could make a good profit, we'd still be at $1850 for those steers."
There is no questioning that is still a very healthy profit.
Mr Strong believes the decline in the cattle market now occurring largely comes down to a difficulty in 'working out how to manage' this new era.
The macro drivers remain as positive as ever, he pointed out.
"Global demand for red meat is forecast to increase by 8 to 10pc across all our developing and developed markets in the next 10 years," he said.
"The amount of red meat required in ten years time will be five times our total exports."
Retail beef prices and consumption
Falling domestic beef consumption is a common discussion at industry conferences.
"It's emotive. We'd like to sell more beef to our mates - they used to eat more of it," Mr Strong said.
The number one driver of declining consumption was price, he reported.
"It's 50pc of the driver of downward consumption. Nothing else - nutrition, sustainability, animal welfare - gets above 10pc."
By comparison, over the past 20 years, chicken consumption has tripled in Australia.
The price of chicken has remained the same, while the price of beef has increased 150pc in that time frame.
"We can get domestic consumers to eat more if we are prepared to sell it to them for less," Mr Strong said.
"I hope it's ok with you but that's not the plan.
"It's now to get consumers to feel comfortable with the price they are paying and the research is telling us that, largely, they are. Consumer commitment to red meat is still very strong."
While the number of people looking to reduce their consumption is holding at the same level, the number of people looking to increase consumption in the past year was 15pc, up from 10pc on the year before.
Their key reasons were nutritional value, convenience and because they simply like eating beef.
The bottom line: High livestock and retail prices are supported by solid demand. And there is now more value being created in supply chains than ever seen before.
Stop panicking about high prices.