@dhr When did livestock prices start coming down? For reference, there is a difference between meat and livestock prices, so you can see an increase in prices for one and a decrease in the other simultaneously. However, usually you should see high correlation between these prices (or lagged prices), or a correlation between the difference in prices and the cost of converting livestock to meat. So, if there’s a difference, it might simply be because the costs for grocers/butchers has increased massively, or because the changes simply haven’t been filtered through, which can go in either direction meaning we might see livestock go up in price or meat go down.
Typically there’s a lag for 2 reasons, first is that price changes take time to go through the economic system. A simple example is that a butcher would order tomorrows (or next weeks/fortnights/months) meat somewhat based on what they can sell it for right now (it’s based on future expectations on what they can sell it for, which in turn are largely based on current prices), so those changes in prices would be delayed. It can also go the other way depending on whether the farmers or grocers/butchers have more or less of a say on the price. The other thing is that groceries (including meat) and livestock are heavily traded commodities, and that’s mostly done through derivatives. This is because farmers/butchers/grocers want to remove their risk of being exposed to short term changes in the prices of groceries/livestocks. This often means that these things are being traded at expectations of their prices in the future. If they’re selling their livestock to the butchers using 6 month future contracts, then any price changes are going to be somewhat lagged by 6 months. During this period where prices are lagged, grocers, butchers, farmers, and financial institutions can all profit (depending on what is lagging what and how their finances are set up) at the expense of each other and the consumers. If this is the case, you’d see correlations between the current price of one product and the price of the other product x units of time a go keeping in mind either could lag the other, and we don’t necessarily know by how much until we test it.
The other thing is simply the processes for grocers and butchers could’ve become more expensive. We’ve seen energy and fuel skyrocket which would cause meat to become more expensive for example. There might’ve been some changes to taxes/grants especially considering international relations with China have been stressed and they’re a major consumer of our meat. Typically, if this is the case you’d see the costs of these processes correlate with the difference in the price of livestock and meat. If this is the case, no one is likely profiting from it (you could go down a rabbit hole regarding the costs in the processes of grocers/butchers and find that someone might be, but it’s unlikely) but rather there are economic inefficiencies that’s costing the consumer and the grocers/butchers. Also note, you can potentially stretch the definition here and list price gouging or colluding etc as processes causing prices to increase, in which case the entities doing that would be profiting at the consumers expense and there are some concerns that Coles/Woolworths might be doing that. If that’s the case, you’d potentially be seeing butchers dropping their prices, but again if Coles/Woolworths are setting the prices then that mightn’t be the case.
I don’t know which way is the explanation though, and I haven’t looked into it at all. However, it’s interesting if there’s a difference, which will likely be explained by one of the above.
