Farm share and price spread in Australia's beef supply chain

Overview
This study uses a case study approach to demonstrate the potential to estimate farm shares and price spreads in Australia using a relatively simple methodology developed by the United States Department of Agriculture Economic Research Service. In this instance, the methodology has been applied to Australian beef price data.

Key Points
• The study demonstrates that data is available that allows an analysis of farm share and price spread for beef sold at domestic retail outlets and to export markets. • The analysis shows that trends in farm share of the retail price and the farm-to-retail price spread were relatively flat between 1970-71 and 2015-16. It also shows that trends in farm share of the export price and the farm-to-export price spread were flat between 1996-97 and 2015-16. • If it is assumed that the emergence of market power beyond the farm gate is likely to be reflected in a sustained widening in price spread or a sustained decline in farm share, then these results suggest that there has been no obvious change in market power within the beef industry over the this period.