Sydney Meat Marketing Margins January 1971 To

Home , June 1974, Lamb and mutton

- 3'.

SYDNEY MEAT MARKETING MARGINS

JANUARY 1971 TO JUNE 1974

G. R. GRIFFITH and R. A. WHITELAW

MISCELLANEOUS BULLETIN 20

Division of Marketing and Economics

?NEW SOUTH WALES. DEPARTMENT OF AGRICULTURE New South Wales Department of Agriculture

Division of Marketing and Economics

SYDNEY MEAT MARKETING MARGINS • JANUARY 1971 TO JUNE 1974

G.R. GRIFFITH and R.A. WHITELAW

Miscellaneous Bulletin N 0 January 1975

Editor: George Mason ACKNOWLEDGEMENTS

The authors wish to record their appreciation to various members of the Division of Marketing and Economics for help with this project. Garry Griffith wishes to acknowledge the assist- ance of the Australian Pig Industry Research Committee in providing funds for his participation in the study.

iii CONTENTS

ACKNOWLEDGEMENTS iii LIST OF TABLES vii LIST OF FIGURES vii INTRODUCTION 1.1 The Problem 1.2 The Concept of Marketing Margins 2 1.3 Previous Work on Meat Marketing Margins

2 METHODOLOGY L. 2.1 Establishing Comparable Prices 4 Auction prices, Wholesale prices Retail prices 5 2.2 Definition of Terms 5 Auction price 6 Wholesale price, Retail price, Retail margin, Share of consumers dollar 7 3 INTERPRETATIONS 9 3.1 Monthly Prices and Margins Jan 1971-June 1974 9 Mutton 9, Lamb 10, Beef 15, Pork 16 3.2 Comparisons Between Meats 17 3.3 Share of Consumers Dollar 19 REFERENCES 29

v. LIST OF TABLES

1 Approximate Average Yield of Various Cuts of Meat from Carcases 8 2 Mutton. Prices and Margins Jan 1971-June 1974 11 3 Lamb. Prices and Margins Jan 1971-June 1974 12 4 Beef. Prices and Margins Jan 1971-Jane 1974 13 5 Pork. Prices and Margins Jan 1971-June 1974 14 6 Average Annual Indices of Prices and Margins 18 7 Annual Averages of the Shares of Consumers Dollar 20 8 Mutton and Lamb. The Share of Consumers Dollar 25 9 Beef and Pork. The Share of Consumers Dollar 26. 10 Lamb. Prices and Wholesale Margin for Trade in 90 per cent Light and 10 per cent Heavy lambs 27

LIST OF FIGURES

Mutton. Auction, Wholesale, and Retail Prices Jan 197I-June 1974 21

2 Lamb. Auction, Wholesale, and Retail Prices Jan 1971-June 1974 22 3 Beef. Auction, Wholesale, and Retail Prices Jan 1971-June 1974 23 4 Pork. Auction, Wholesale and Retail Prices Jan 1971-June 1974 24

vii • CHAPTER 1

INTRODUCTION

1.1 THE PROBLEM

This study provides a set of basic data on Sydney meat price and margin movements for the period January, 1971 to June, 1974.1 Auction, wholesale, and retail prices; wholesale and retail margins; and the shares of the consumers dollar going to producers, wholesalers, and retailers, are presented on a monthly basis for beef, mutton, lamb and pork.2 This data was generated as a basis for analysing price formation in meat marketing. In recent years, livestock and meat marketing methods in Australia have come under close scrutiny and criticism from consumers, primary producers, the meat marketing industry itself, and academics. The general concern has been with the overall efficiency with which the present meat markets function. Typically though, attention has been focused on. price formation, and in par- ticular on three aspects of this function, namely the highly' variable and uncertain returns to producers, the role of 'middle men' and the rising trend in retail prices. Pressure from various groups concerned about meat marketing resulted in the formation of a number of committees and study groups to examine and report on this subject. Producer action led to the establishment of two state marketing boards - the Sheep Meats Marketing Board for the State of New South Wales and the Lamb Marketing Board of Western Australia. Reports from a government enquiry in Victoria [71 and parliamentary enquiries in New South Wales C:15] and at the federal level E11?-3 have presented a cross-section of views on the ills of the present marketing system. Study groups formed by the New South Wales Branch of the Australian Agricultural Economics Society En and the Australian Pig Industry Research Committee C43 presented further analyses of the available• information.

'The study follows some work initiated by. R.N. Irish C1213. Irish calculated margins for beef, mutton, and lamb, for 1969-71, but because of differences in calculation procedures, the two sets of data are not comparable. For details of the calculation procedures used by Irish seet12, pages 18-20]. 2A11 price data for this study was obtained from the Division of Marketing and Economics; N.S.W. Department of Agriculture. Auction and wholesale prices relate to Homebush Saleyards and Meat Hall respectively. Retail prices are from a representative sample of Sydney retail outlets.

••• The analyses in the above studies mainly described the structure of the various livestock and meat markets. Little attention was given to quantifying the pricing mechanisms of these markets3 or to assessing their efficiency. The marketing margins Presented in this bulletin were compiled to provide a basis for subsequent quantitative analysis of market structure, conduct and performance. Marketing margins, by showing the magnitude of. price differentials between each market level, are one means of quantifying some aspects of a marketing system. For ox- ainle the retail margin gives some:measure of retail marketing costs and can be used to assess the proportion of retail price which these costs comprise. Also, comparison of margins with operating costs of firms operating at various market levels gives an indication of profit, and allows comment on market performance. Simple measurement of prices and margins cannot alone .answer questions about market efficiency and profitability, but the calculation of margins is an important preliminary step [A.

1.2 TT-fl CONCEPT OF MARKETING MARGINS

A marketing margin of a commodity is the difference in its Price between the various levels of the marketing system. For meat, as with other commodities, price needs to be expressed on an equivalent weight basis for com- -oarisons to be properly made between the various marketing levels.5 In this study, the wholesale margin is the difference between equivalent weights of meat sold in retail and wholesale markets.

The wholesale and retail margins are the amounts available to wholesalers and retailers to cover their costs of marketing services and provide a profit margin. They reflect changes in the demand and supply for these market services.

1.3 PREVIOUS WORK ON MEAT MARKETING MARGINS

Australian studies on meat marketing margins have been done by Woodward r203, Hodan DOI Anderson I:231 and Irish [12,pp. 18-22, appendix V3. Woodward made a 'detailed study of Sydney margins for beef, lamb and mutton on a weekly and monthly basis for the period 1961-67, and on a quarterly and annual basis for the period 1957-66. -Hodan calculated prices and margins for beef, lamb, mutton and pork for all State capitals on an annual 'basis for the period 1967-71. Anderson used Hodants data in a South Australian

3The B.A.E. have recently released a study which provides empirical information on market conduct in pig marketingin Australia Cs).

Defined in chapter 2.

5An explanation of this is given later.

6L,ore precise definitions of these margins appear later. This study uses the comparative prices method to calculate margins. This method, and others, ,have been reviewed by Hodan C10,pp. 131-1321 Houston [ii,pp.3-9] and Woodward [20,Dp.7-93. context. Irish tabulated monthly beef, lamb, and mutton margins for Sydney for 1969-71., Overseas, the USDA began calculating meat marketing margins during the 1950's E18, 193 and annual and quarterly checks on beef and pork have been maintained since 03. The National Commission on Food Marketing also calculated U.S. meat margins E133, •recommexiding changes in USDA procedures •which were subsequently. implemented E.53. similar commission in Canada E62, an °EEC study E163, and Houston in U.K. E113, also examined aspects of meat marketing by margin analysis. CHAPTER 2

METHODOLOGY

2.1 ESTABLISHING COMPARABLE PRICES FOR THE CALCULATION OF MARGINS

Duewer 26] has described the requirements, in respect of the basic price data, necessary for deriving accurate marketing margins by the comparative price method. These requirements adapted for use in this study, are given below.?

AUCTION PRICES8

(1) Comparisons between live animal price and price of retail cuts should be for meat of a similar quality. (2) Live animal prices should be expressed per unit of weight of retail meat which the animal represents, i.e. the dressed weight.

In addition, the live animal price used is the gross price for the animal less the value of inedible byproducts

WHOLESALE PRICES (1) Similarly to (1) above, comparisons between wholesale carcase price and the price of retail cuts should be for meat of comparable quality. (2) Wholesale prices for an area are averages calculated by weighting the component prices by the volume of meat sold at each price. Attention therefore needs to be paid to terms of sale and volume discounts. (3) Wholesale prices need to be adjusted to allow for weight losses which the meat is subject to before being sold at retail. This is explained more fully in Section 2.2.

7Duewer also points out that the basic price data used for calculating margins needs to conform to further requirements if they are to be compared with margins for other geogra- phical areas.

Duewer uses the difference between wholesale price and farm Price as his measure of wholesale margin. As his requirements for farm prices data are also relevant to auction Prices data, they have been adopted here. Duewer's farm price is the proceeds to the producer "at the farm gate" for the sale of stock, and is equivalent to auction price less his marketing costs. We used auction prices because of the inability to realistically estimate the producers marketing costs. RETAIL PRICES

(1) Retail prices for the various cuts must be representative of the geographic areas for , which they are quoted. That is, an un- biased sample of butchers shops in an area' must be obtained before retail prices representative of that area can be collected. (2) The importance of retail price specials should be considered. The volumes of meat . sold at special and normal retail prices should be obtained before an average retail - price can be calculated.

The Department of Agriculture auction, wholesale, and.retail - prides used in thit--ptudy'already comply with . some of the conditions proposed. by Puewer.. The auction . price is at estima:bed.price•fo±' the dressedcarcase, based'' on Homebush livestockaUctionTrice.- The value of inedible offal and pelt is deducted from the livestock. auction -price and this is expressed per unit weight of estimated dressed carcase. Also, retail prices are. -.collected from a representative. sample pf retail ottl.et's. in Sydney. • However, the nature of the available data it such that it does- not allow for 6 check to be made for compliance with all of the conditions proposed - by Duewer and a number of assumptions have to be made: that prices at auction, wholesale, and retail levels are for meat of comparable quality; that prices at all. levels are. representative accurate, that .discounts.at whol.esaIe. are accounted rforin. reported prices; and that the volume of different cuts sold is proportional to approximate meat yields from 'a carcase. In addition, the. shrinkage of a. given weight of meat between . slaughter and retail outlet iS.accounted-for .by correction factors. (The details- of these points are explained •. Section .2.2). •

. The following qualifications regarding the - data, have 'a bearing on the 7trpaidity. of. thp-abovqmentione4. Firstly, - price recording Offider'p, cl,assify auction price according to a subjective assessment of quality, sold - but meat at wholesale or retail is not classified by quality.

Secondly, no allowance is made for the, time lag between slaughtering, ptocessi.n6-44 distribution sale and eventual 'of meat, when comparing prices at the various levels. market This ±'613Ieln- is-cOmpensated•for.to some etent, by using monthly average prices. . • •

2.2 DEFINITION OF TERMS The proportions used to calculate composite auction and wholesale prices (for example mutton definitions prices)• given in the below, are estimates of the amount each class of trade in of stock at Homebush (in this case wethers, and hoggets, ewes)• and are based on work done by p. 193. Irish

Although in practice, these proportions from time to fluctuate time according to variations in supply demand, the figures and used represent the average situation the period being studied. for 6.

• With one exception the tables in this bulletin presenting data on prices and marketing margins for the various meats (Tables 2-5) are compiled on the basis of this average trading situation. The exception, Table 10, (p. 27), presents the auction and wholesale prices and the wholesale margin relevant to a wholesaler specialising in light lamb.9 In the following definitions all prices are average monthly prices and are expressed in cents per kilogram. AUCTION CARCASE PRICES are prices for livestock sold at Homebusil Saleyards, expressed in terms of the dressed carcase. The value of inedible offal and pelt has been deducted from the livestock auction price and this is expressed per unit weight of dressed carcase. Auction carcase prices for the following classes of livestock were obtained from the Division of Marketing and Economics: hogget, .wether, ewe, light lamb, heavy lamb, light suckers, heavy suckers, vealer, yearling, steer, light porker, and heavy porker. MUTTON AUCTION CARCASE PRICE equals 0.08 (hogget auction carcase prici) + 07g7-TWITgar auction carcase price).'+ 0.25 (ewe auction carcase price). LAMB AUCTION CARCASE PRICE equals 0.50 (light lamb auction 10 carcase price) +0.50 (heavy lamb auction carcase price). BEEF AUCTION CARCASE PRICE equals 0.40 (vealer auction carcase Fiace-WOyearling auction carcase price) + 0.20 (steer auction carcase price).

9It is assumed for the case of a wholesaler specialising in light lamb, that 90 per cent of his business is in light lamb and 10 per cent is in heavy lamb. Average monthly auction and wholesale prices are higher than the average position of 50 per cent light and 50 per cent heavy lambs shown on Table 3. Also, the wholesale price rises more than the, auction price, giving a larger wholesale margin than the Table 3 average position. Retail prices (and consequently retail margin) do not appear in Table 10 because retail price data for light lambs are not available. Similarly margins calculated solely for yearling beef, light pork and so on would be different from the average shown in Tables 4 and 5 respectively.

10Prior to October 1972, lamb prices were recorded by the Division of Marketing and Economics in the two categories, lambs and suckers (light) and lambs and suckers (heavy). From October 1972, prices were recorded in four categories, namely lambs light, lambs heavy, suckers light and suckers heavy. To calculate auction carcase price from these latter categories, we averaged heavy lamb and heavy sucker prices to obtain heavy lamb price and averaged light lamb and light sucker prices to obtain light Iamb price. This ensured that lamb auction carcase prices before and after October 1972 were comparable. The recording procedure in April, May and June, 1974 reverted to that of prior, to October 1972, so the calculation method that we used was adjusted accordingly.- PORK AUCTION CARCASE PRICE equals 0.25 (light porker auction carcase Price -I- 0.75 heavy porker auction carcase price). The weight ranges in which light and heavy porker prices are quoted are 23 kg to 27 kg and 36 kg to 41 kg, respectively. ADJT3TED AUCTION CARCASE PRICE equals auction carcase price multiplied by 1.05 for beef and pork, and 1.025 for mutton and lamb. This adjustment of auction carcase price is made to allow for the "shrinkage", or loss in weight in meat due to refacing, dehydration, spoilage and pilfering, which 11 occurs between auction and wholesale. WHOLESALE PRICE is for carcase meat delivered to retail butchers shops from the Metropolitan. Meat Industry Board wholesale meat market at Homebush Bay. To calculate average lamb, mutton and pork wholesale prices, the same weights were given to the prices of component meats as used for calculating the corresponding auction prices. Because wholesale beef Prices are reported in different categories to auction beef prices, beef wholesale price equals 0.40 (veal wholesale price) + 0.40 (yearling wholesale price) 4- 0.20 (ox and heifer wholesale price). ADJUSTED 7HOLESALE PRICE. Wholesale price was adjusted for shrinkage between wholesale and retail. Because the shrinkage is of the same magnitude as that which occurs between auction and wholesale (81 D. 293 the same correction factors were used.

WHOLESALE :UR= equals the difference between adjusted wholesale price and adjusted auction carcase price.

RETAIL PRICE is calculated from retail price for each cut for the four meats. The resulting retail price is a weighted average, with weights being the percentage yield of cuts of meat from a carcase. These weights, obtained from N.S.W. Department of Agriculture publications[1431 are set out in 12 Table I, p. 8. RETAIL MARGIN equals the difference between retail price and adjusted wholesale price.

SHARE OF COMM/IRS DOLLAR. The farmers share of the consumers dollar is auction price as a percentage of retail price. The wholesalers and retailers shares are the wholesale and retail margins, respectively, expressed as a percentage of retail price.

dmirkiemr" The 5 per cent beef and pork adjustment factor was taken from U.S.A. sources (8, D. 293. A smaller shrinkage factor was used for sheep because there is less bruising, fat trimming and moisture loss for the smaller carcase. A shrinkage factor of 2.5 per cent was adopted, on. the advice of Mr. K. McDonald, a price recording officer of the Division of Marketing and Economics. 12 71utton and lamb cutlet prices are recorded by the Division of Marketing and Economics on a per cutlet basis. The average weight of a cutlet was assumed to be 113.4 gm when calculating Price per kg. Because sausage trimmings prices were difficult to obtain, beef sausage mince prices were used instead. Bone and fat prices were those paid by members of the Tallow Manufacturers Association to retail butcheries. 8.

TABLE 1

ApproxtuaLLAInaLelig.ld of Various Cuts of Meat from Carcases

LITTON Yield LAMB Yield Witaillimmitalmilatadi.1134.111.111 cT 0 Legs 22.25 Legs 24.25 Shoulders 15.75 Shoulders 17.50 Chump Chops 7.25 Chump Chops 8.00 Short Loin Chops 11.00 Short Loin Chops• 13.00 Cutlets 7.00 Cutlets 6.00 Neck Chops 6.75 Neck Chops 6.00 Kidney 0.50 Kidney. 0.50 Sausage Trimmings 17.00 Sausage Trimmings 15.00 Fat 6.00 Fat 3.25 Bones and Loss 6.50 Bones •and Loss 6.50 100.00 100.00

BEEF

Legs • 25.25 Fillet Steak 1.25 Chops 19.50 Rump Steak 4.50 Foreloin 17.00 Sirloin Steak 5.75 Hands 11.75 Topside Steak 5.50 Springs 8.00 • Round Steak 3.75 Trimmings 1.00 Silverside 5.75 Fat 4.25 Rolled Brisket 6.00 Kidney 0.50 Rolled Rib Roast 9.50 Head 10.00 Chuck Steak 9.00 Bones and Loss 2.75 Blade Steak 7.50 Gravy Beef 6.00 100.00 Minced Steak 4.25 • Kidney 0.25 Pieces and Trimmings 6.00 Bones 5.35 Fat 8.00 Cutting Loss 1.65 100.00 CHAPTER 3

INTERPRETATIONS

3.1 MONTHLY PRICES AND MARGINS JAN 1 I - JUNE 1 4

Eutton Mutton prices and margins are presented in Table 2 and Figure 1 (on pp. 11 and 21 respectively). A unique feature of the Price data presented in Table 2 is the constant wholesale price for mutton from April 1971 to February 1972. This feature is not repeated for the other periods shown, and it will be seen later that prices for other meats do not display a similar constancy. The retail Price for mutton changed only about 3 cents during this period so possibly the demand was sufficiently stable for wholesalers to offer mutton to retailers at a . fixed price over this period. An alternative explanation is that the monthly data is recorded as constant averages of midpoints of weekly ranges and the sequence of constant prices could have arisen because of these data collection procedures which tend to 'smooth' variations in the data. In August and Septembers 1971, the wholesale margin was lowered to about 6 cents by high auction prices. However, a fall in the auction Price resulted in an expansion in the margin in October, November and December, 1971. In July and. August 1972, increased auction prices substantially reduced the wholesale margin to 5.8 cents and 4.1 cents. However, in September there was a wholesale price increase and a resultant expansion in the margin. At the retail level, the retail margin which had. averaged 25.4 cents in 1971, dropped temporarily in September 1972 to 19.0 cents, the lowest figure for the period being studied. This was the result of a wholesale price rise of just over 6 cents combined with a drop in retail price of just over I cent. In October 1972, because wholesale price did. not . decline significantly and retail price rose by 7.8 cents to 64.8 cents, retail margin expanded to 28 cents. In November' and December 1972, retail price continued to rise and the retail margin expanded further to 30.2 cents and 54.1 cents respectively.

After January 1973, the upward trend in auction prices continued at a much faster rate. The April auction price of 41.1 cents and the January price were the only ones below the annual average of 48 cents which was well above the 1972 and 1971 averages of 21.1 cents and 15 cents respectively. The margins for 1973 are interesting. On average, wholesale and retail margins were above 1971 and 1972 levels but they fluctuated a lot more. In February 1973, the wholesale margin dropped to 2.2 cents (lowest for the period being studied) because the dramatic auction price rise was not 10„

matched by the wholesale price increase. A large wholesale price increase followed in March and the wholesale margin expanded to 11.3 cents. In April when auction price fell the margin expanded further to 16.7 cents because the wholesale price did not move downwards as much as auction price. Be- tween April and August; 1973, auction price rose 17.2 cents while wholesale price rose-only 6.5 cents. This resulted in a reduction in the wholesale margin over these four months. However, for the four months after August 1973, wholesale prices increased while aucti611. Price declined, thus allowing a large expansion in the wholesale margin. Wholesale margins of 18.7 cents, 20.3 cents and 20.5 cents in October, November and December 1973 were well above the annual average (11.7 cents).

Large retail margins of 37.4 cents and 37.9 cents occured in July and August 1.973 because retail prices increased far more than small wholesale price increases.'

Although short-term peaks occurred in January and I:ay, 1974 mutton auction prices fell in the first six months of that year so that the average was some 2 cents below the 1973 average price. Wholesale prices generally maintained their late 1973 values and although a slight drop was registered in June, wholesale margins also remained at comparable levels. The steady upward trend in retail values continued so that the average for the first half of 1974 was about 16 per cent above the 1973 average. Retail margins trended upward even faster over this period. Lamb

Lamb prices and margins ae presented in Table 3 and. Figure 2 (on pp. 12 and 22 respectively).

In June and July, 1971 1 the effect of the seasonal winter shortage of lamb on price and margin movements can be seen. Auction price increases caused a contraction of the wholesale margin to 9.8 cents and 8.1 cents. In August 1971 wholesale price increased to reverse the downward trend in the wholesale margin. However, when auction price began to 'fall in September 1971, wholesale price remained at high levels and the margin expanded each month from September 1971 through to February 1972.

At the retail level it can be seen that retail price aid not fluctuate much in 1971 and variations in the size of the margin were mainly caused by wholesale price changes. For example, in August when the wholesale. price increased by 5.5 cents to reach 55.3 cents the retail margin declined by 7.4 cents to reach 22.4 cents. In September when wholesale price dropped to 50.4 cents, the retail margin expanded to 26.8 cents.

In July and August, 1972, auct.ion price increases resulted in some contraction of the wholesale margin (10.6 cents in July and 10.5 cents in August) even though wholesale prices did increase. .These increases in wholesale price continued on into September 1972 even thoUgh auction Price started to fall in that month. The result was an increase of 6.1 cents in the wholesale margin to reach 16.6 cents for the month. The wholesale price increases in August and July, September, 1972, resulted- j.n a contraction in retail margins to 24.5 cents, 24.8 cents and 23.7 resDectively, cents' whichare- low compared with-the yearly average of 32.2 cents. 11.

TABLE 2 MUTTON

Prices and Marketing Margins Jan. 1.971 to J1,1112_12221

1.111,1711.0.0.0. Prices and Margins (Cents per Kilogram) • , Auction Adjusted Adjusted Whole- Whole- Retail Retail Carcase Auction Whole- sale sale Price Margin Price Price sale Price Margin Price

1971 J 14.8 15.1 26.0 25.4 10.3 48.7 - 22.8 F 14.6 14.9 26.0 25.4 11.1 50.4 24.4 LI 13.0 13.3 - 26.9 26.2 13.6 1 49.1 22.2 A 11.9 12.2 27.1 26.5 14.9 51.9 24.8 M 11.9 12.2 27.1 •26.5 14.9 52.4 25.3 J 14.1 14.5 27.1 26.5 12.7 52.2 25.1 J 16.3 16.7 27.1 26.5 10.4 52.5 25.4 A 20.7 21.2 27.1 26.5 5.9 54.3 27.1 S 19.8 20.3 27.1 26.5 6.8 54.9 27.8 0 13.7 14.0 27.1 26.5 13.1 55.0 27.9 1T 14.3 14.7 27.1 26.5 12.4 53.0 25.9 D 14.8 15.1 27.1 26.5 12.0 53.3 . 26.2 AVERAGE 15.0 15.4 26.9 26.3 11.6 52.3 25..4

1972 J 15.5 15.9 27.1 26.5 11.2 55.3 28.1 F 15.7 16.1 27.1 26.5 11.1 52.3 . 25.2 II 14.4 14.7 24.9 24.2 13.1 53.0 28.1 A 13.6 14.0 24.9 24.2 10.9 51.0 26.2 M 16.2 16.6 26.0 25.4 9.4 48.8 22.8 J 18.5 19.0 27.1 26.5 8.1 50.0 22.9 J. 22.4 23.0 28.8 28.1 5.8 51.6 22.8 A 26.9 27.5 31.6 30.9 4.1 58.1 26.5 S 29.6 30.4 37.9 37.0 7.6 56.9 19.0 0 27.9 28.6 36.7 35.8 8.1 64.8 28.0 1T 26.2 26.9 ' 36.1 35. 5 9.3 66.3 30.2 D 26.3 27.0 33.9 33.1 6.9 68.1 34.1 AVERAGE 21.1 21.6 30.2 29.4 8.5 56.3 26.2

1973 J 25.3 25,9 36.2 35.3 10.3 68.4 32.,2 'I.' 46.4 47.5 49.7 48.5 2.2 77.6 27.9 M 48.5 49.8 61.0 59.5 11.3 86.3 25.3 A 41.1 42.2 58.9 57.4 16.7 87.0 28.1 M 47.8 49.0 58.3 56.9 9.3 91.0 32.7 J 49.9 50.1 59.7 , 58.2 9.6 90.5 30.8 J 56.0 57.4 62.6 61.1 5.2 100.0 37.4 A 58.3 59.7 65.5 63.9 5.8 103.4 , 37.9 S 56.7 58.1 69.7 68.0 11.6 102.5 32.8 0 50.7 52.0 . 70.7 69.0 18.7 106.4 35.7 N 47.8 49.0 69.2 67.6 20.3 105.7 36.5 D 47.3 i 48.5 68.9 67.3 20.5 105.6 . 36.7 AVERAGE 48.0 49.2 60.9 59.4 11.7 93.7 32.8

1974 J 52.3 53.6 68.3 66.6 14.7 103.5 35. F 50.8 52.1 68.3 66.6 16.2 102.7 34.4 LI 43.9 45.0 68.9 66.4 23.1 102.3 ' 34.2 A 45.1 46.2 65.1 63.6 18.9 109.3 44.1 Id 48.7 49.9 65.1 63.6 18.3 113.5 48.3 J 34.0 34.9 62.1 60.6 27.2 118.3 - 56.3 AVERAGE 45.8 47.0 66.2 64.6 19.7 108.3 42.1 12.

TABLE 3 LAMB .

Prices and Marketi Mar ins Jan. lq I to June

Prices and Margins (Cents per Kilogram)

Auction Adjusted Adjusted Whole- Whole- Retail Retail Carcase Auction Whole- sale sale Price Margin Price Price sale Price Margin Price•

1971 J 34.6 35.5 42.4 41.3 6.1 73.2 30.9 • F 36.6 37.4 45.2 44.1 7.8 79.1 33.9 • M 35.3 36.2 47.4 46.3 11.3 80.9 33.4 A 32.2 33.0 47.4 46.3 14.4 81.0 33.6 LI 30.6 36.9 46.3 45.2 9.4 79.0 52.6 J 35.9 36.8 46.9 45.7 9.8 79.2 32.3 J 41.9 43.0 51.1 49.8 8.1 80.0 29.8 A 45.0 46.2 56.7 55.3 10.5 79.1 22.4 S 39.0 40.0 51.7 50.4 11.7 78.5 26.8 O 31.4 32.2 49.7 48.5 17.5 77.4 27.7 N 30.5 31.3 48.0 46.8 16.8 78.3 30.2 D 29.1 29.8 47.0 45.8 17.2 79.1 32.2 AVERAGE 35.2 36.1 48.3 47.1 12.2 78.6 30.3

1972 J 28.6 29.3 .47.4 46.3 18.1. .82.3 34.9 . F 27.1 27.8 47.2 4.0 19.4 81..2 34-.1 M 26.1 26.8 44.1 43.0 17.3. - 80.7 , 36.7 A 25.9" 26.6 43.8 42.7, 17.2 ..78.8 35.0 M 30.1 30.9 45.2 44.1 14,3 .7847. 3346. J. 34.5 35.4 '47.7 4645, 12.3 79.3 31.6

J 46.7 49.9 • 58.5 57.0 10.6 83.0 24,5

,A 55.4 56.8 • 67.,. 65.6 10.5 922 24...8. S 52.1 53.4 70.0 68.3 16.6 93.8 23.7. O . •42.9 43.9 • 59.9 58.4 15.9 940 34.13 N 39.0 39.9. 58.2 56.8- 18.2. 94.2 36.0 D '39.4 40.4 56.5 55.1 16.1 - .93.8 37.3

AVERAGE 37.3 • 38.2 53.8 • 52.5 15.6-- 8640 32.2

1973 J 40.9 41.9 • 56.5 • 55.1 14.6 93.5 • 37.0 57.2 58.6 • 74.9 73.0 16.2 107.4 32.6 LI 56.9 58.3 72.6 70.8 14.3 • 108.7 36.1 A • 59.0 60.4 73.4 71.6 13.0 1097 • 36.3 60.0 61.5 80.5 78.5 19.0 113.5 33.0

J 66.9 68.5 82.3 80.3 13.8 116.2 • 33.8 J. • 79.2 81.1 97.1 94.8 • 16.0 119.7 22.5 A 80.7 82.7' 94.6 92.3...... 11.9...... 130.4 5.8 77.2 79.1 -90:9- 88-06 11.7 133.4 42.5 O 68.0 69.'7 84.1 82.0 14.4 134.7 50.6 N • 70.5 72.3 • 89.0 • 86.8 16.7 135.7 46.8 D 70.6 72.4 88.7 86.5 16(.3 138.3 49.7 AVERAGE 65.6 67.2 82.0 80.0 14.8 120.1 38.1 1974 J 86.0 88.2 98.9 96.5 10.7 146.1 47.2 F 88.9 91.1 106.6 104.0 15.5 149.8 43.2

LI 83.8 • 85.8 102.1 99.6 16.3 151.4 49.3 A 88.5 90.7 99.4 • 97.0 8.7 148.9 49.5 Id 91.8 94.1 101.0 98.5 6.9 • 152.7 51.8 J 77.3 79.2 97.9 95.5 18.7 154.8 56.9 .1s.VE:PLAGE 86.0 88.2 101.0 98.5 12.8 150.6 49.6 13.

TABLE - BEEF

Prices and Earketi 1:ar ,ins Jan. 1971 to June 1974

Prices and Margins (Cents per Kilogram)

1111111111111.1. Auction Adjusted Adjusted Whole- Whole- Retail Retail Carcase Auction Whole- sale sale Price Margin Price Price sale Price Margi Price 1 1971 J 61.9 65.0 72.6 69.2 7.6 107.2 34:6 F 63.5 66.7 74.4 70.8 7.7 107.5 33.1 m 63.0 66.2 72.6 69.2 6.4 108.3 35.7 A 60.4 63.4 70.8 67.4 7.4 107.8 37.0 M 59.3 62.3 68.3 65.0 6.0 108.9 40.6 J. 61.7 64.8 70.6 67.2 5.8 107.6 37.1 J 63.0 66.2 73.1 69.7 7.0 109.5 36.3 A 70.9 74.1 81.5 77.6 7.4 111.2 29.8 S 71.9 75.4 84.1 80.1 8.6 112.2 28.1 O 68.0 71.4 82.9 78.9 11.5 113.9 31.1 N 63.8 67.0 76.4 72.7 9.4 111.1 34.7 D 62.3 65.5 74.1 70.5 8.6 113.1 39.1 AVERAGE 64.1 67.3 75.1 71.5 7.8 109.9 34,8 1972 J 62.1 65.2 74.1 70.5 8.8 113.8 39.7 F 62.1 65.2 73.5 70.0 8.3 111.9 38.4 M 61.2 64.3 71.3 67.9 7.0 112.1 40.8 A 59.0 61.9 68.9 65.6 6.9 111.3 42.4 M 59.6 62.6 66.0 62.8 3.4 111.2 45.2 J 59.8 62.8 66.9 63.7 4.1 '111.6 44.7 J. 62.4 65.5 69.4 66.1 3.9 114.3 /i11.9 A 67.4 70.8 73.2 69.7 2.5 113.7 40.5 S 68.4 71.8 76.9 73.3 5.2 113.7 36.8 O 69.1 72.5 76.4 72.7 3.9 117.2 40.8 N 68.9 72.4 76.1 72.5 3.7 117.9 41.8 D 66.7 70.0 73.0 69.5 3.0 117.9 45.0 AVERAGE 63.9 67.1 72.1 68.7 5.1 113.9 41.8 1973 J 66.1 69.4 74.6 71.1 5.2 114.4 39;8 F 74.5 78.3 82.7 78.8 4.5 112.6 29.9 M 78.7 82.7 85.6 81.6 3.0 112.7 27.1 A 81.1 85.2 89.9 85.6 4.7 131.7 41.8 M 76.2 80.0 90.6 86.3 10.6 135.5 44.9 J. 79.2 83.1 96.1 91.5 13.0 136.3 40.8 J 84.0 88.2 95.0 90.5 6.8 139.6 45.1 A 91.4 96.0 103.3 98.4 7.3 147.8 44.5 S 92.5 97.1 108.7 103.5 11.6 149.4 40.7 O 91.9 96.5 109.8 104.6 13.3 152.6 428 N 92.7 97.3 111.5 106.2 14.2 154.0 47.4 D 87.4 91.8 110.7 105.4 18.9 155.9 45.3 VERGE 83.0 87.1 96.6 92.0 9.4 136.9 40.3 1974 J 89.8 94.3 109.8 104.6 15.5 165.6 55.8 F 89.4 93.9 110.9 105.6 17.0 159.9 49.1 M 82.2 84.3 106.1 101.0 21.8 161.9 55.8 A 83.2 87.3 105.0 100.0 17.7 160.9 55.9 Mi 80.6 84.6 106.5 101.4 21.9 161.6 55.1 J 68.2 71.6 98.5 93.8 26.9 159.6 61.1 AVEUGE 82.2 86.0 106.1 101.1 20.1 161.6 55.5 14.

TABLE 5 ...PORK

Prices and Marketin Mar ins Jnn. to June 1• 4

Prices and Margins (Cents per Kilogram)

Auction Adjusted Adjusted Whole- Whole- Retail Retail Carcase Auction Whole- sale sale Price Margin Price Price sale Price Margin Price

1971 J 66.3 69.6 85.0 81.0 15.4 110.5 25.5 F 64.3 67.5 87.0 82.9 19.5 110.5 23.5 M 65.4 68.7 82.4 78.5 13.7 112.8 30.4 A 65.4 68.7 82.2 78.3 13.5 111.8 29.6 ' LI 63.4 66.6 83.3 79.3 16.7 112.1 28.8 J. 66.7 70.0 86.3 82.2 16.3 112.8 26.5 J 68.5 71.9 86.3 82.2 14.4 113.7 27.4 A 70.3 73.8 88.3 84.1 14.5 115.9 27.6 S 72.7 76.3 88.1 83.9 11.8 117.7 29.6 O 73.1 76.8 87.9 83.7 11.1 118.6 , 30.7 N 67.4 70.8 88.1 83.9 17.3 121.1 33.0 D 67.4 70.8 88.1 83.9 17.3 121.6 33.5 AVERAGE 67.6 71.0 86.1 82.0 15.1 114.9 28.8. --.... 1972 J 63.2 66.4 88.1 83.9 21.7 126.6 38.5 F 62.1 65.2 84.4 80.4 19.2 121.8 37.4 M 59.1 62.0 80.6 76.8 18.6 115.5 34.9 A 57.7 60.6 79.5 75.7 18.9 114.8 35.3 LI 53.5 56.2 76.0 72.4 19.8 112.7 ' 36.7 J 50.4 52.9 74.9 71.3 22.0 111.4 , 36.5 J 51.1 53.7 76.0 72.4 22.3 112.3 36.3 A 55.7 58.5 75.1 71.5 16.6 111.4 36.3 S 57.1 59.9 73.8 70.3 13.9 110.0 36.2 O 59.2 62.2 73.8 70.3 11.6 114.2 40.4 N 54.0 56.7 73.8 70.3 17.1 115.9 42.1 D 51.5 54.1 73.8 70.3 19.7 116.8 43.0 AVERAGE 56.2 59.0 77.5 73.8 18.5 115.3 37.8 1973 J. 50.4 52.9 73.8 70.3 20.9 117.8 44.0 F 60.8 63.8 80.0 76.2 16.2 116.8 36.8 M 60.8 63.8 86.1 82.0 22.3 119.3 33.2 A 61.1 64.1 86.1 82.0 22.0 120.9 34.8 M 60.8 63.8 84.4 80.4 20.6 127.8 -43.4 J 61.7 64.8 84.1 80.1 19.3 127.9 43.8 J. 65.2 68.5 84.2 80.2 15.7 125.4 41.2 A 74.6 78.3 92.7 88.3 14.4 134.8 42.1 S 77.3 81.2 95.7 91.1 14.5 142.8 47.1 O 83.4 87.6 101.6 96.8 14.0 .152.2 50.6 N 94.1 98.8 107.6 102.5 8.83 149.6 42.0 D 94.5 99.2 123.6 117.8 24.4 161.8 38.1 AVERAGE 70.4 73.9 91.7 87.3 17.8 133.1 41.4

1974 J. 97.1 102.0 122.3 116.5 20.3 166.1 , 43.8 F 98.1 103.0 125.6 119.6 22.6 166.4 408 M 99.3 104.2 129.7 123.5 25.5 168.5 33.8 A 95.1 99.9 126.8 120.8 26.9 168.6 41.8 M 100.4 105.5 129.7 123.5 24.2 170.7 41.0 J 96.7 101.6 129.4 133.3 27.9 181.2 51.8 AVERAGE 97.8 103.7 127.2 121.2 24.6 170.3 .43.0 in 1973, the main feature was the large price increases at auction, wholesale and retail, which occurred after January. 7Iholesale margin fluctuated markedly throughout the year. Between April and May, 1973, the wholesale margin increased by 6.0 cents as a result of a large wholesale price increase. However, between May and June a large auction price increase resulted in a 5.2 cents reduction in wholesale margin to reach 13.8 cents. For the last two months of the year large margins of 16.7 cents and 16.3 cents occurred as a result of wholesale price increases. Retail margins began to fluctuate after July, 1973, In July, a large auction and wholesale price increase meant that the retail margin fell to 22.5 cents. In August 1973 retail price increased by 10.7 cents to give an expansion in the retail margin to 35.8 cents. The margin continued to expand in September 1973 and October, 1973, but contracted in Noveniber as a result of a wholesale price increase. A retail price increase followed in December 1973 and this resulted in an expansion of the retail margin. by 2.9 cents to reach 49.7 cents. • Auction, wholesale and retail lamb prices rose considerably during early 1974, and their six month averages to June 1974, were approximately 31,23, and 25 per cent respectively above 1973 average prices. The auction price rose from 72.4 cents in December 1973 to 94.1 cents in May 1974, before falling sharply in June 1974, but the wholesale margin of only 6.9 cents in May 1974,was-the Idiii6dt-Wholesa16 margin since January 1971. in June 1974 wholesale price dropped 3 cents when auction prices fell 16 cents resulting in a trebling of the wholesale margin to 18.7 cents. Retail prices rose steadily over the Period and in conjunction with the fairly level wholesale prices caused further escalation in the retail margin. An increase of about 30 per cent' over average 1973 values was evident in the retail margin for the six months to June, 1974. . Beef

Beef prices and margins are presented in Table 4. and Figure 3 (on pp. 13 and 23 respectively).

In August 1971, auction and wholesale prices increased substantially, but retail price increased only. marginally. The result was a contraction of the retail margin to 29.8 cents while the wholesale margin stayed. relatively constant at 7.4 cents. In September 1971 a similar situation prevailed, with wholesale and retail margins of 8.6 cents and 28,1 cents, respectively. In October 1971 a reduction in auction price to 68.0 cents resulted in an expansion in wholesale margin to 11.5 cents.. In December 1971, wholesale and auction prices continued to fall, but retail price remained high, resulting in an expansion of the retail margin. to 39.1 cents.

In 1972, the wholesale margin was below the 1971 average of 7.8 cents, for ten months of the year, and there was a yearly average of 5.1 cents. In comparison, the average retail margin for 1972 of 41.8 cents was up from the 34.8 cents 1971 average. In August 1972, increasing auction prices and law wholesale prices combined to form a very low wholesale margin of 2.5 cents.

In 1973, auction price increases lowered the wholesale margin until May and June, when falling auction yr

price and rising wholesale price resulted in margins of 10.6 cents and 13.0 cents, respectively. Despite these relatively large margins the 1973 average rose to only. 9.4 cents, as compared with the 7.9 cents average 1971 level. In February and 1,:arch, 1973, increasing wholesale prices and a steady low retail price combined to form low retail margins of 29.9 cents and 27.1 cents, respectively. From Larch to April, 1973, retail prices increased 19.0 cents, and retail margin Increased 14.7 cents. Throughout 1973 prices increased substantially at all levels. After the dramatic reduction in February and Larch, the retail margin stayed high for the rest of the year. Retail price increases kept in time with wholesale price increases except in July when retail price increased at the same time as wholesale price fell.

A relatively stable wholesale price and a rising auction price resulted in a low wholesale margin for July. 1973. In the following four months the wholesale margin increased as wholesale price moved with high auction prices. In December 1973 the largest margin for the year of 18.9 cents was formed as a result of a 5.3 cents reduction in auction price. During 1974, beef auction prices continued to decline from the late 1973 highs, with a substantial fall occurring in June 1974. The average beef auction price for the first six months of 1974 was comparable with the 1973 average price. On the other hand, wholesale prices remained at the same high levels as late 1973 and this caused a rapid rise in the wholesale margin to over double the 1973 average of 9.4 cents. - The retail beef margin in early 1974 was also fairly stable, but higher than 1973 margins by almost 40 per cent. A sharp upturn in the retail margin occurred in June 1974 as retail prices dropped only 2 cents in response to a fall in the wholesale price of almost 8 cents. Pork

Pork prices and margins are presented in Table 5 and Figure 4 (on pp. 14 and 2 respectively). The February 1971 wholesale margin of 19.5 cents was the highest for the year. This margin was reduced by 5.8 cents to reach 13.7 cents in the following month because wholesale price fell as auction price rose. In November and December, 1971, the large wholesale margin of 17.3 cents was a result of wholesale price remain- ing high while auction price fell. In these two months the retail price continued to rise, resulting in the highest retail margins for 1971 of 33.0 cents and 33.5 cents respectively.

Annual average auction and wholesale prices for 1972 were below 1971 levels, but retail price was slightly higher. Both wholesale and retail annual average margins for 1972 were well above 1971 levels. On average the wholesale margin had increased 3.4 cents, while retail margin had increased 9.0 cents. The largest wholesale margins for 1972 occurred in June and July when levels of 22.0 cents and 22.3 cents were attained due to low auction prices. Large retail margins in October, November, and December, 1972, were a result of the combined effect of lower wholesale prices and slightly higher retail prices. During 1973, pork prices at auction, wholesale and retail rose to their highest level for the first three years of the period being studied. Large pork auction price increases in February, July, August, September, October and November, of 1973, reduced wholesale margins for these months and they were below the average for the year of 17.8 cents. In December 1973 wholesale prices rose substantially resulting in an increase in the wholesale margin by 15.6 cents to a record level for the three years of 24.4 cents. A record retail margin for the three years, 1971 to 1973 also occurred in 1973. In October 1973, as a result of a large retail price increase, retail margin rose to 50.6 cents. In November 1973 this margin was reduced by a wholesale price increase and a retail price decrease to 42.0 cents. In December 1973 the retail margin was further reduced by the large wholesale price increase. This occurred even though retail price also rose to reach its highest level for the three years to December 1973.

For the first six months of 1974, auction, wholesale, and retail Pork prices generally remained at a higher level than those for December 1973, with retail prices showing a substantially higher rise (from 161.8 cents in December 1973 to 181.2 cents in 'June 1974).

Wholesale and retail margins were also high and in June 1974 when retail Price jumped over 10 cents the retail margin rose to 51.8 cents, the highest level for the period of the study.

3.2 COMPARISONS BETWEEN MEATS

The preceding Section (3.1) has presented an analysis of the movements in prices and margins for mutton, lain, beef, and pork individually. This Section looks at comparisons between the prices and margins for the four meats. Table 6 shows the annual average prices and margins for the four meats, expressed as indices in relation to their 1971 average values, which have been set at 100. The indices express the prices and margins as a percentage of the 1971 values.

At the auction level, mutton has shown the greatest percentage rise, increasing in price by over three times the 1971 level. Lamb, a complementary product, also increased substantially over this period. Beef and pork had smaller rises - 28 per cent and 46 per cent respectively. On a cents/ kilogram basis pork was the most expensive meat at auction during the first half of 1974, the relatively low index for pork for that year being because the 1971 base price for this meat was much higher than the prices of the other meats. The auction price for lamb for the first half of 1974 surpassed that for beef, while the price for mutton lagged far behind. TABLE 6 (I) Averarie Annual Indices of Prices and Mar ins

Indices (1971 = 100) Year(2 Mutton Lamb Beef Pork

Auction Price 1971 100 100 100 100 1972 140 106 100 83 1973 319 186 129 104 1974 305 2W! 128 146

7:holesale Price 1971 100 100 100 100 1972 112 111 96 90 1973 226 170 129 107 1974 246 209 141 148

Retail Price 1971 100 100 100 100 1972 108 109 104 100 1973 179 153 125 116 1974 207 192 147 148

Wholesale 1.2x.zin 1971 100 1_00_ 100 100 1972 73 128 65 123 1973 101 121 121 118 1974 170 105 258 163

Retail Magi 1971 100, 100 100 100 1972 103 106 120 131 1/) 1973 129 126 116 1974 166 164 159 149

(1) Each index expresses the price/margin as a percentage of the corresponding 1971 value which has been set at 100. (2) Figures for 1974 relate to the first 6 months only.

Percentage movements in wholesale prices followed changes in auction prices for each meat fairly closely, although for lamb and mutton the increases were not so great. These relative movements meant, however, that the wholesale margins increased at different rates for each meat. After during the middle section of the period, the lamb whole- rising dur- sale margin was only fractionally higher during 1974 than The wholesale margins for pork and mutton increased ing 1971. 1974 by about two-thirds. The largest jump was for beef - the wholesale margin being 158 per cent greater than in 1971. Retail prices rose by smaller percentages than did auction or wholesale prices, although lamb and mutton retail prices approximately doubled during the 42 month period. Retail margins therefore *generally rose by a lesser amount in percentage terms than did retail prices, and reached a level some 50-60 per cent higher in 1974 than in 1971. 19.

3.3 SHARE OF CONSUMERS DOLLAR

The final price of meat to the consumer (i.e. the retail price) may be dissected into three components - corresponding to the auction price, the wholesale margin, and the retail margin. These can be considered as represent- ing, respectively, the return to the farmer, the return to the wholesaler, and the return to the retailer. For the purposes of comparison, these three components are usually expressed in terms of per dollar of retail price. The farmers share of the consumers dollar is the auction price expressed in terms of per dollar of the retail price, and measures in effect the value of the live animal as a proportion of the value of the product sold to consumers. The wholesalers and retailers shares of the consumers dollar are the wholesale and retail margins, expressed in terms of per dollar respectively, of retail price, and they measure the relative value of the market services added to the value of livestock to transform it into the product required by the consumer. The farmers share is a function of the demand for, and supply of, livestock while the wholesalers and retailers shares are a function of the demand for, and supply of, market services. Because the component shares to farmer, wholesaler and retailer of each consumer dollar sum to one dollar, variations in one of the shares is compensated exactly by corresponding changes in the other two shares. Over the 42 months under study, all three components of the retail price have fluctuated quite substantially, although the wholesalers and retailers shares have been more stable than the farmers share. Furthermore, the wholesalers and retailers margins have trended upwards during this period, mainly because of cost increases, so although retail and wholesale prices have followed the same direction as auction prices, the difference between them has been widening over time (see Figures 1-4: pp. 21-24). Table 7 shows the movements in the farmers, wholesalers and retailers shares for mutton, lamb, beef and pork on an average annual basis for each of the three years 1971 to 1973 and for the first 6 months of 1974.13 Mutton and beef exhibit similar patterns of movements in the respective shares. The farmers share rose and the wholesalers and retailers shares fell from 1971 to 1973 as the rate of increase in auction prices exceeded that in wholesale and retail margins. With the fall in mutton and beef auction prices in the first half of 1974 and the continued expansion of wholesale and retail margins during this period, the farmers share for these meats declined and the wholesalers and retailers shares rose. With lamb, the steady increase in auction prices outweighed the rise in the retail margin, so the farmers share increased substantially and the retailers share showed

The share of consumers dollar on a monthly basis is presented in Tables 8 and 9, pages 25 and 26. TABLE 7. Annual Averao-es of the Shares of Consumers Dollar

Share of Consumers Dollar ($ (1) Year Farmers Wholesalers Retailers

=TOE' 1971 .29 .22 .49 1972 .38 .15 .46 1973 .53 .13 .35 , 1974 .44 .18 .39

LAL3 1971 .46 .16 .39 1972 .45 .18 .38 1973 .56 .12 .32 1974 .59 .09 .33

B3LIF 1971 .61 .07 .32 1972 .59 .05 .37 1973 .64 .07 .30 1974 .53 .13 .34

.7011117. 1971 .62 .13 .25 1972 .51 .16 .33 1973 .55 .14 .31 1974 .60 .14 .25 , (1) Figures for 1974 relate to the first 6 months only. (2) Each row of the share of the consumers dollar adds to A.00. Inexact summations are due to rounding0

a steady fall. Since the wholesale margin for lamb remained fairly constant in absolute terms over the 42 month period of study, the share to the lamb wholesalers dropped by about 50 per cent. From the 1971 averages to the January 1974 June 1974 averages, the shares of the pork consumers dollar going to farmers, wholesalers and retailers, remained roughly the same. There were some variations during the period, however due to the different patterns of increase in auction price and wholesale and retail margins. 21.

Cehtl per ki

12.0

100 Reretri( Price

Adjusted, WhotecA,I,C` Pr;c.,e

Actjusre Ava•o Price.

igi I 1q13

Figure 1 Mutton. Auction, Wholesale, and Retail Prices Jan 1971-June 1974 22 cents per k3 I L, o

Activsred. kikoiesoJe, Pn.ce

ro Adiu stred A vat on Pr ca

I q I I cr711-

Figure 2 Lamb. Auction, Wholesale, and Retail Prices 412 1971-June 1974 Cep.fis Pe kS,

RztAi( Price

••••••••• ••••

....•••••••••••••••••• -

f• .

too

6.0

...... -

ter le113 NI+

Figure 3 Beef. Auction, Wholesale, and Retail Prices Jan 1971-June 1974

•• 4,

t• 24.

Ce t's ,pe r

".T

/SO

1190

PH)

I to

44-0

• ' •

lei / 1112-

Figure 4 Pork. Auction, Wholesale. and Retail Prices Jan 1971-June 1974 TABLE 8 MUTTON LAMB

The Share of Consumers Dollar. Monthly Basis, (Cents)1

MUTTON LAMB.

FARMER WSALER RETAILhR FARMER W'SAL.tdi RETAILER

1971 0- 31 22 47 49 9 42 30 22 48 /4-7 10 43 M 27 28 45 45 14 41 A 24 29 48 41 18 42 M 23 29 48 47 12 41 J 28 24 48 47 12 41 J 32 20 48 53 lo 37 A 39 11 50 58 13 28 S 37 12 51 51 15 34 26 24 51 42 23 36 N 28 23 49 40 21 39 D 28 23 50 38 21 41 AVERAGE 29 22 49 46 16 39

1972 J 29 20 51 36 22 42 F 31 21 4-8 34 24 42 M 28 25 53 33 21 45 A 27 21 51 34 22 44 M 34 19 47 39 18 4-3 38 16 46 45 16 /4-0 (7' 45 11 44 60 13 30 A 47 7 46 62 11 27 S 53 13 33 57 17 25 O 44 13 43 47 17 36 N 41 14 45 42 19 38 D 40 10 50 43 17 40 AVERAGE 38 15 46 4-5 18 38

1973 40 15 47 /15 16 40 61 3 36 55 15 30 58 13 29 54, 13 33 A 49 19 32 55 12 33 54 10 36 511. 17 29 55 11 314- 59 12 29

3. 51 5 37 68 • 13 19 58 6 37 63 27 57 11 32 59 8 32 49 18 34 52 11 38 46 19 35 53 12 34 46 19 35 52 12 36 AVERAGE 53 13 35 56 12 32.

^ 1974 3. 52 14 34 60 32 50 16 34 .61 44 23 33 57 10 33 A 42 17 41 61 6 33 44 16 43 62 34 3. 30 23 48 51 12 37 AVERAGE 44 18 39 59 9 33 Notes: . The three shares for each meat for each month add to one dollar. • •W'SALER. Wholesaler. TABLE 9 BEEF PORK

The Share of Consumers Dolla.r. Cents)/

BEr2 FARMER W SALER RETAILER FARMER SALER RETAILER

1971 f 61 7 32 63 2 14 23 62 7 31 61 18 21 61 6 33 61 12 27 59 7 34 61 12 26 57 6 37 59 15 26 J 60 5 34 62 14 24 a. 61 6 33 63 13 24 67 7 27 64 13 24 S 67 8 •25 65 10 25 63 IQ 27 65 9 26 60 8 31 58 14 27 58 8 35 58 14 28 AVERAGE 61 7 32 62 13 25 1972 j 57 8 35 52 17 30 F 58 7 34 54 16 31 Y. 57 6 36 54 16 30 A 56 6 38 53 16 31 l'A 56 3 10 50 18 33 J 2 56 4 40 47 20 33 J 57 3 39 48 20 32 A 62 2 36 53 15 33 S 63 5 32 54 13 33 O 62 3 35 54 10 35 N 61 3 36 49 15 36 D 59 3 38 46 17 37 AVERAGE 59 5 37 51 16 33 1973J 61 5 35 45 18 37 pi 70 4 27 55 14 32 M 73 4 24 53 19 28 A 65 4 32 53 18 29 M 59 8 33 50 16 34 J 61 10 30 51 15 34 j 63 5 32 55 13 33 A 65 5 30 58 11 31 S 65 8 27 57 10 33 O 63 9 28 58 9 33 N 63 9 28 66 6 •28 D 58 12 29 61 15 24 AVERAGE 64 7 30 55 14 31 1974 ti 57 9 34 61 12 26' F 59 11 31 62 14 25 II 52 14 35 62 15 23 A 54 .11 35 59 16 25 ,111 52 14 34 62 ,14 24 J 45 17 33 53 15 29 AVERAGE 53 13 34 60 14 25 Notes: 1. The three shares for each7rieat for each. tionth add to One dollp.r. 2. VPSALER = Wholesaler. 27

TABLE 10 LAMB

Prices and Wholesale Mar in for Trade in 0 er cent Heavy and 10 per cent ight ambs

Prices and Margins (Cents per Kilogram) Auction Adjusted Wholesale Adjusted Wholesale Carcase Auction Price Wholesale Margin Price Price Price 1971 J 36.1 37.0 46.2 47.3 10.4 F 38.1 39.1 49.4 50.6 11.5 M 36.7 37.6 49.8 51.1 13.4 A 34.1 35.0 49.8 51.1 16.1 M •33.3 34.1 48.7 49.9 15.8 J 37.8 38.8 49.7 50.9 12.2 J 43.4 44.4 54.4 55.8 11.3 A 46.4 47.6 59.4 60.8 13.3 S 40.7 41.7 54.2 55.5 13.8 O 33.0 33.8 52.0 53.3 19.5 N 32.4 33.2 50.8 52.1 18.8 D 30.9 31.7 49.4 50.6 18.9 AVERAGE 36.9 37.8 51.1 52.4 14.6 1972 3 30.0 30.8 49.8 51.1 20.3 F 28.9 29.6 49.8 51.0 21.4 M 28.1 28.8 47.4 48.6 19.7 A 28.9 29.3 46.9 48.1 18.8 M 32.1 32.9 49.5 59.7 17.8 J 37.4 38.3 50.1 52.2 13.9 3 49.7 50.9 63.4 65.0 14.1 A 1 57.8 59.2 72.6 74.4 15.2 8 54.1 55.4 74.7 76.6 21.2 O 43.8 44.9 62.8 64.4 19.5 N 39.6 40.6 60.3 61.8 21.2 D 40.6 41.6 58.6 60.1 18.5 AVERAGE 39.3 40.2 57.2 58.7 18.4

1973 3 42.0 43.1 51.3 52.6 9.5 F 58.7 60.2 77.2 79.1 18.9 M 56.6 58.0 76.3 78.2 20.2 A 61.2 62.7 76.9 78.8 16.1 M 62.2 63.7 83.6 85.7 22.0 J 69.8 71.6 85.5 87.7 16.1 J 83.7 85.8 92.7 95.0 9.2 A 88.0 90.2 97.7 100.1 9.9 S 83.6 85.7 94.1 96.5 10.8 O 75.6 77.5 88.4 90.6 13.2 N 78.6 80.5 89.5 91.7 11.2 D 78.0 80.0 91.7 94.0 14.0 AVERAGE 69.8 71.6 83.7 85.8 14.3

1974 J 85.1 87.3 101.0 103.5 16.2 F 85.8 91.0 107.2 109.9 18.9 M 83.3 85.4 104.0 106.6 21.2 A 92.1 94.4 102.0 105.2 10.8 M 96.6 99.0 104.5 107.1 8.1 3 83.1 85.1 101.5 104.0 18.9 AVERAGE 88.2 90.4 103.5 106.1 15.7 29.

REFERENCES

• Agnew, D.B., "Recent Trends. in Price Spreads for Beef and Pork", MamhaIinsi_ETLREalanal..§1-122Iiim No. 182, August, 1971, pp. 26-29. [23 Anderson, K., "Not Much Beef in Meat Marketing Margins", Rural Market Outlook, 3(3), August, 1973, Pp. 2-7. Agricultural Economics Society (N.S.W. [3]Australian Branch), "Report of the Study. Group on Meat Marketing in N.S.W.", Australian Farm Mana ement Journal, 9(2), pp. 1-106. [z.] Australian Pig Industry Research Committee, Report of tijeg ...... Gmuon...p_tl_aeFeasisiityLof,...L.21ileraeing. a National Pig_parcase Grading System In Australia, banberra, April, 1973. Cs] Bureau of Agricultural Economics, As ects of Pi and Pi meat Marketin in Australia - A 'reliminar. Surve Canberra, May, 1973.

[63 Parliament of Canada, Eport of the Royal Commission on Price Spreads of Food Products Vols. I II III, •ttawa, 1959, 1960. Cozens, L:E., En uir into the Economics of Marketin of Livestock and Meat in Victoria, Department of rgwRculture,Me]- -1-76-ti-Fne,y,-7r--1973- 1:83 Duewer, L.A., "Revised Price Spreads for Beef and Pork", M22hftIlas_ang...2EtaanaLIJILLIlatim, No. 175, November, 1969, pp. 23-31. E9 Goldberg, R.A., "Marketing Costs and Margins; Current Use in Agribusiness Market Structure Analysis", Journal of Farm Economics, 47 (5)1 December, 1965, PP. 1352-1365. 00] Hodan, M., "Meat Marketing Margins - Problems of Definition and Measurement", Farm Policy, 11 (4), March, 1972, pp. 130-133. 01] Houston, G., "Meat Marketing Margins in Britain", Imunal_21_AsEi-oltanagsagaLaas xv (1)1 May, 1962, pp. 2-18.

[11 Irish, R.N., Submission to the Select Committee of the Le islative Assembl U on the eat Industr N.S.W. Department of Agriculture May, 1972. E13) National Commission on Food Marketing, "Cost Components of Farm Retail Price Spreads for Foods", Technical Study, No. 9, Washington, D.C., 1966.

[14] N.S.W. Department of Agriculture, Division of Marieting and Economics, N.S.W. Production and Marketin of Beef; N.S.W. Production and Marketin• of Lamb; N.S.W. Pro- duction and n; .S.W. Production and arketing of ,11.4„ga, arious ssues).

['is] N.S.W. Parliament, Report from the Select Committee of the Le islative Assemb17-7317776-F5a-TEMIT-77PaiTs and 11, Sydney, August, 1972. F163 OEEC, Marketin and Distribution Mar ins for Livestock and Meat in 0.E0 Countries, OEEC, Documentation in Food and Agriculture Series, No. 15, Paris, 1959. (117] Parliament of Australia, Re ort from the Joint Parliamentar Committee on Prices on the tabilization of Meat Prices, Canberra, beptember, 173. 8] USDA, Beef MarketingMar ins and Costs, USDA, Economic 0 Research Service, Miscellaneous Publication, No. 710, February, 1956.

E193 Pork MarkmgrEina_11421_12Et2, USDA, Economic Research Service, Miscellaneous Publication, No. 711, April, 1956. DO Woodward, K.R., An Em irical Investi ation of the N.S.W. Meat Market, unpublished M.Ag.Ec. Thesis, University of New England, Armidale, October, 1968.