Price Determination in the Australian Food Industry A Report
Price Determination in the Australian Food Industry A Report
Price Determination in the Australian Food Industry A Report
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THE IMPACT OF DROUGHT<br />
The sector<br />
Direct impact<br />
Background factors<br />
Effect on prices<br />
Dairy<br />
Less feed available for milk<br />
production.<br />
Lower supplies at sharply<br />
higher prices of feed gra<strong>in</strong><br />
available to milk producers<br />
on a spot basis.<br />
Weakened <strong>in</strong>ternational<br />
market due to oversupply<br />
from <strong>the</strong> European Union and<br />
a slow<strong>in</strong>g of demand <strong>in</strong> major<br />
markets.<br />
Global shortage of feed<br />
gra<strong>in</strong>s due to poor climatic<br />
conditions <strong>in</strong> key produc<strong>in</strong>g<br />
countries.<br />
No direct impact on dairy<br />
product prices <strong>in</strong> <strong>the</strong><br />
domestic market because<br />
milk supplies ma<strong>in</strong>ta<strong>in</strong>ed to<br />
meet fresh milk market<br />
needs.<br />
Production flows <strong>in</strong> major<br />
parts of <strong>the</strong> <strong>in</strong>dustry fell but<br />
by an <strong>in</strong>sufficient volume to<br />
put pressure on national<br />
daily milk supplies.<br />
Beef<br />
Producers opted for earlier<br />
turnoff ra<strong>the</strong>r than feed<br />
cattle through to full fattened<br />
maturity, so creat<strong>in</strong>g a<br />
temporary oversupply of beef<br />
on <strong>the</strong> market.<br />
Export beef market<br />
experienced sharp decl<strong>in</strong>e<br />
due to <strong>the</strong> fall <strong>in</strong> consumer<br />
demand <strong>in</strong> Japan with a<br />
bov<strong>in</strong>e spongiform<br />
encephalitis outbreak which<br />
depressed world prices.<br />
Lower beef prices at<br />
wholesale – little impact on<br />
retail prices.<br />
<strong>Price</strong> <strong>Determ<strong>in</strong>ation</strong> <strong>in</strong> <strong>the</strong> <strong>Australian</strong> <strong>Food</strong> <strong>Industry</strong> A <strong>Report</strong><br />
Lamb<br />
Pork<br />
Cut <strong>in</strong> sheep numbers and<br />
<strong>the</strong>refore lamb supply.<br />
Reduced volume has placed<br />
great pressure on <strong>the</strong> meat<br />
processors who face lower<br />
throughputs and tight<br />
product marg<strong>in</strong>s.<br />
Less feed available for pork<br />
production.<br />
Lower supplies of feed gra<strong>in</strong><br />
at sharply higher prices<br />
available to domestic<br />
customers on a spot basis.<br />
Pork production fell due to<br />
poor producer prices.<br />
Cont<strong>in</strong>u<strong>in</strong>g strong<br />
<strong>in</strong>ternational demand for<br />
lamb.<br />
Increas<strong>in</strong>g imports of pork<br />
<strong>in</strong>to <strong>the</strong> commodity sector of<br />
<strong>the</strong> domestic manufactured<br />
meat market. Imports more<br />
competitive with <strong>the</strong> ris<strong>in</strong>g<br />
value of <strong>the</strong> <strong>Australian</strong> dollar.<br />
Increased product prices<br />
through <strong>the</strong> cha<strong>in</strong>. Lower<br />
<strong>in</strong>creases passed through<br />
<strong>in</strong>to retail product due to<br />
price competition from o<strong>the</strong>r<br />
meats.<br />
No impact on retail prices<br />
due to reta<strong>in</strong>ed supply l<strong>in</strong>es<br />
of fresh product.<br />
Reduced wholesale and OTH<br />
prices for carcass and major<br />
portions.<br />
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