THE Eastern Young Cattle Indicator, a measure of east coast prices based on recent sales from 26 saleyards, has soared from around $3.40 a kilogram in November to a record $4.5025.
Meat and Livestock Australia analyst Ben Thomas said the key drivers behind the surge in prices are the weaker Australian dollar and strong import demand from the United States.
"Australia exports around 70 per cent of its beef and the Aussie dollar is now around that US80¢ mark.
"The second key thing is the US, which is the world's largest beef producer and consumer is currently at a low point in its production," he said.
"Cattle prices are also very dependent on rain. Virtually all of 2014 and 2013 was drought conditions over our key cattle regions but in the last two months we've had rain.
"It's been a cracker start to the year."
Beef prices have surged as recent rains ease the pressure on some farmers who had been dumping stock.
Woolworths tends to buy its beef direct from farmers on long-term contracts, whereas as Coles is, relatively speaking, more exposed to saleyard prices.
Product lines marketed under special price campaigns cannot be lifted for time without incurring the wrath of the Australian Competition and Consumer Commission.
It is also difficult to know the flow-through impact of higher beef prices on the retail shelf without seeing the contract terms between retailers and suppliers.
However, with less need to dump stock and robust demand for beef globally, it does seem there will be upward pressure on long-term contracts as well as beef directly exposed to saleyards.
