The Country 13/08/26: Jen Corkran talks to Jamie Mackay

We speak with a senior analyst for animal protein at RaboResearch to talk beef mince. And there’s no mincing words about it: the long-held affordable red meat staple is now out of reach for many Kiwis as consumers look to alternative sources of protein, such as chicken and pork. But beef mince at $24/kg is not all bad news for the economy.

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Episode Transcript

Speaker 1 (00:00):
Meat Matters Week on the Country with PGG Rights and
Livestock delivering trusted advice and nationwide livestock expertise.

Speaker 2 (00:09):
Welcome back to the Country. We're not mincing our words
on the show today. It's Meat Matters Week and here's
an expert in the field. She is Rabobanks red meat
expert and from my poor pun on mincing words, Jen Corchran,
let's talk about mince. It used to be the domain
of the price conscious no longer.

Speaker 1 (00:32):
Good afternoon, Jamie. Yes, mintz is more expensive right than
it's ever been. And I think we might have touched
on this sometime last year when we had a check
here too, and you know, things are still still moving
in that space, and it is really driven by that
demand for trim, which is mince essentially out of the US,
which is a well sung story. But you know, we've

(00:52):
gone up another dollar a kilo for mince since about
October last year, sitting it just over twenty four dollars
a kilo on everach, so so not cheap at the supermarket, Jamien,
as you say it was, you know, or historically it's
been a real good go to red meat option because
it is very versatile in terms of what you can
do with it, but now it's not really that cheap option.

(01:13):
And if we look back to you know, twenty eighteen,
twenty nineteen, we were sitting between fourteen and sixteen dollars
a kilo. So that's more than just food inflation. It's
driven by those export prices and the competition that that
creates for US as an exporting nation.

Speaker 2 (01:26):
So how are consumers changing their buying habits because, let's
face it, or lambs not cheap, far from it, but
we do have those two cheaper options chicken or pork.

Speaker 1 (01:40):
Yeah, that's right. So chicken and pork are kind of
steady as she goes, Jamie. You know, they've increased slowly
over over many years, but they are the cheaper protensions.
And I think what happens, you know, when we start
to see the red meat prices rise, is that, you know,
consumers will often start to switch down to some of
these cheaper white protein like pork and chicken breast, which

(02:01):
is sort of sitting close to that fifteen to seventeen
dollars pe kilo range in the supermarket, for example. But
the other thing that happens is it's also expensive if
we think about it in food service, with your quick
service restaurants such as McDonald's KFC, they end up kind
of offering up more chicken options, more budget options for consumers,

(02:24):
and so without realizing that, we'll see, you know, more
and more of that being consumed because it's expensive for
everyone in the supply chain and then the value chain
when it comes to that consumer side. So it's just
an interesting time with our wonderful red meat price for
our farmers, but those slow on effects that we might
start to see from those high prices on the consumption side.

Speaker 2 (02:44):
So Jen Corkram with US Rabobanks red Meat expert, Yeah, look,
this is great news on the export front, not so
flash at all on the home front. And I think
you refer to it as sticker shock when you go
along to the supermarket and you see at twenty four
bucks aquilo, When, though, Jen, are we going to see

(03:05):
like price resistance and consumer or the consumer changing his
or her behavior at what price point? Does this happen?
Particularly in the US?

Speaker 1 (03:15):
Yeah, And this is the question, isn't it globally right now?
Because we'd meet prices are really high across the globe
because of this whole you know, lack of supply situation.
But interestingly, in the United States, Jamie, the demand has
actually been holding up for beef, especially a lot firmer
and stronger than what you know, we might have expected. So,

(03:36):
you know, my colleagues in the US have talked about
the fact that the U S beef demand has been
a lot more resilient than what you know, we may
have expected so far, at least even with these record prices,
And that kind of tells us that consumers aren't quite
kind of walking away from beef at this point, but
they're kind of changing within the category what they're purchasing,
so looking to more of that burger kind of thing,

(03:57):
which is great for his own because it's that important
trim that goes with their ferny meat that they need
for burgers, but also choosing different degrees within the value
of those other cuts as well. So that's ending in
the US. But you know, one thing we often talk
about is that high prices can be the cure for
high prices. So at some stage, you know, we think

(04:17):
that there will be a point where the consumer says,
you know, this is getting enough for me, and that
might just naturally start to let things level out, remembering
that we are at farm gate price level sitting, you know,
anywhere between fifty and sort of sixty or seventy percent
above the five year average across all cohorts of kettle
right now. So we've got a you know, we're at
a high point, and even if things come back a

(04:39):
little bit, Jamie, I think it's still pretty positive of
the next you know, a couple of years at least
in terms of that global demand for beef.

Speaker 2 (04:46):
Jen Cochran out of Ravobank, out of Hamilton. Thanks for
your Tom today on the Country. Always appreciate it.

Speaker 1 (04:52):
Thanks Ami,