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· Posted on
February 21, 2024

The price of quality wagyu keeps going up 'coz apparently you just can't have a summer barbie without it?

AA Co reported a huge increase in operating profits... and they recon it ain't stopping any time soon.

What's the key learning?

  • AA Co, Australia's biggest cattle herd operator, reported a nearly 28% increase in operating profits in the six months to September 30.
  • AA Co reckon their revenue will continue to grow as they keep pushing up their prices until they potentially find the price ceiling.
  • The elasticity of demand measures how consumer demand changes when there is a change in the price of a product.

👉 Background: AAco, which stands for The Australian Agricultural Company, is Australia’s biggest cattle herd operator with over 6.4 million hectares, or 1 per cent, of Australia’s total landmass.

👉 What happened: Last week, AA Co reported a nearly 28% increase in operating profits in the six months to September 30, compared to the same period last year.

👉 What else: And it ain't stopping any time soon. They reckon their revenue will continue to grow as they keep pushing up their prices... until they potentially find the price ceiling.

What's the key learning?

💡The elasticity of demand measures how consumer demand changes when there is a change in the price of a product.

💡There’s no exact science to pricing products or services. If you price something too low, you may see the product fly out the door. If you price it too high, then you may see it stuck on the shelves.

💡AA Co increased the price of meat by 19 per kilogram during that past 6 months and has warned that it will continue to raise the prices because apparently meat lovers just won't go without their products.

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