It’s worse than a beetroot stain on your best white T-shirt: the classic Aussie burger is getting more expensive.
The beef pattie, tomato (or barbecue) sauce, bacon, bread and yes, even the beetroot have all risen in price over the last year, adding pressure on the local takeaway joint to pass those extra costs on to you.
Rabobank senior analyst Michael Harvey said there are factors – including worker shortages, and supply chain issues – that mean prices will stay higher for some time.
“Your burger’s going to be a lot more expensive,” he said.
So let’s break that burger down.
Beef mince, for burger patties, is one of the cheapest ways to buy beef. But even that has become more expensive as the price of beef rose 11.2 per cent in Melbourne and 12.4 per cent in Sydney.
Butcher Matthew Papandrea said beef prices have been creeping up over the last year or more.
The end of drought has meant producers have been keeping more cows to breed up their herds, meaning fewer cattle have been sold for meat. There has also been price pressure from staffing shortages, across abattoirs, transport and butcheries.
“To feed a family, you can’t buy premium cuts anymore,” he said.
Papandrea, from Joe Papandrea Quality Meats in Sydney’s Wetherill Park, said the industry will recover from the extreme COVID-related staff shortages but he’s not sure how much prices will fall.
“We’re a retail business, we’ve got a big rent bill, we have a big electricity bill because of all the machinery we use and the refrigeration.”
Robert Hermann, from agriculture analysis firm Mecardo, said Australia’s beef prices are also driven by the international market. Our beef is a premium product overseas, and that affects what we pay at home.
Bacon, on the other hand, has had a slower rise. Hermann said that’s because pork doesn’t suffer from seasonal changes like beef, and very little Australian pork is exported.
“So we don’t have that driver of price from the export market pushing up the domestic price like we do with lamb and beef,” he said.
Cheese is also less affected by seasons, and egg production is also more contained, keeping inflation for both those products relatively low, Hermann said.
Bread is also not as expensive as other components for now, but Hermann said Australia exports 90 per cent of our wheat crops, and global supplies were being affected by countries getting nervous about food security.
Lettuce, tomato and onion are standards on a burger – even beetroot, if you’re so inclined. Over the past year, the price of vegetables has jumped up: 14 per cent in Sydney, and 13 per cent in Melbourne.
The recent floods in northern NSW and Queensland disrupted vegetable availability and distribution, as Coles said in its note to investors on Thursday.
“Inflation in fresh produce was driven by vegetables such as cucumbers, broccoli and tomatoes,” Coles said.
But there are other issues at play. Higher fuel and fertiliser prices have had a huge effect on production costs, Harvey said, and fertiliser is expected to stay expensive for a while. There are also labour shortages, which can affect everything from picking and sorting to distribution.
If you want chips on the side, as well as paying more for potatoes your oil of choice is also getting pricier.
This is where food security comes into play again: Indonesia, the world’s largest palm oil producer, has effectively banned its export in a bid to keep oil prices low domestically. That has knock-on effects around the world, as supplies of sunflower oil are also constrained due to the war in Ukraine.
Harvey said the sort of government intervention we’re seeing in Indonesia is a wildcard that adds even more complexity to food prices into the future.
“The supply chain issues are going to linger well into 2023.”
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( Information from smh.com.au was used in this report. To Read More, click here )