Retail meat prices failed to escape the inflationary pressures that have gripped the Australian economy over the past year. Higher fuel, housing and finance costs were the main contributors to the Consumer Price Index (CPI) for the June quarter surging 1.5% on March, taking the annual increase to 4.5% (Australian Bureau of Statistics).

For the 12 months to June, transportation costs increased 7%, underpinned by an 18% rise in fuel costs, while costs associated with financial and insurance services increased 10%. Other price increases for the past year included rents (8%), electricity (10%), and a 5% increase in both health costs and alcohol and tobacco prices.

In comparison to the overall inflation rate of 4.5%, food prices increased 3.9% for the past year, with higher grain prices the main cause. While most food items that use grain as a key ingredient increased above the general 4.5%, such as cakes and biscuits (8%) and bread (7%), the higher cost of grain for feed also contributed to increased prices for milk (12%), cheese (14%), poultry (11%, to $4.10/kg) and pork (7% to $12.63/kg). Partially offsetting the higher prices for other foods was fruits and vegetables, down 13% and 3%, respectively.

Retail beef prices for the year to June increased at only 1.7% ($15.71/kg), well below both the CPI and food group inflation rate. Contributing to the relatively small increase for the year was a 3% fall in grassfed cattle prices over 2007-08, due to increased grassfed supplies and the impact of the A$ on export volumes. In contrast, grainfed cattle prices have risen due to the high feed costs.

Retail lamb prices increased 4.2% for the year to June ($12.72/kg) due to falling supplies and strong local and overseas demand.