16 August

The huge jump in the price of meat in Australia in the past decade got me wondering. We produce a LOT of meat, it didn’t make sense. It turns out the main reason is the same reason gas (and through gas, electricity) got expensive here. It wasn’t the usual social media suspects, of the big supermarkets. Nor was it drought. The main reason is that meat, like gas, is priced by the international export market. Australia produces far more meat than it needs for itself, so most of it is exported. International meat prices are sky-high, so that means meat farmers make a LOT of money exporting the meat. It also means they’re not going to then sell their meat cheaply to Australians, even to Australian supermarkets, and take a cut in their profits. Australian buyers are then forced to pay what the export market pays. Exactly the same thing as happens with Australian gas. Ironically what would return meat prices to historical levels would be for Australia to produce a lot LESS meat, so we’re not captive to the export market. The same for gas, if we produced a lot LESS gas, gas would be a lot cheaper here. The exact opposite to what ‘supply and demand’ people will tell you.