ANZCO Foods Market Update - February 2024

With January behind us we can now get fully focused on 2024 and doing everything we can to increase prices for your beef and lamb.

Chinese New Year is currently in full swing. Much is made of the importance of this holiday period for the direction of travel of the Chinese beef and sheepmeat market generally, however expectations going into this year’s holiday have been relatively low on the back of continued poor data coming out of the Chinese economy. The best we can probably hope for is that consumption gets a sufficiently strong enough boost to help importers and that further processors work their way through a chunk of the high in-market inventories that remain an issue, allowing the market to find a better balance as we look into Q2. The weeks immediately following Chinese New Year are notoriously slow, even in a good year, so we won’t be expecting any great rush of demand in the short term, which will mean prices for beef and sheepmeat should remain subdued.

The US market for beef is showing some meaningful signs of life. Reports continue to show that herd numbers are down and domestic supply is tightening beyond the point of comfort for end-users, and that appears to finally be having an impact on buyer behaviour. Brazilian beef has flooded into the market during January with nearly 80% of their available quota access now full. It will be good to get this volume done with quickly, and while having this volume in market will not help to accelerate the current market sentiment, it is volume everyone knew would be available and has largely been factored into people’s thinking when looking ahead to their own forward positions leading into summer and the grilling season. With bull and cow numbers relatively tight in New Zealand so far this year, New Zealand exporters should be able to keep buyers sweating a little as we work through February and March. This should also have a positive impact on market sentiment, so this will be one to watch in the coming weeks.

The benefit of a firming US beef market is that Chinese buyers will also need to reconsider their own approach to price negotiations. While they may not be seeing growth in demand within their consumer base, the sheer scale of the Chinese market means they need to be actively buying every month, so if we have our US customers leading the charge it will mean Chinese customers will have no other choice but to follow suit. Again, not necessarily something that will make a meaningful change to revenues in the short term, but it all bodes well for a stronger second half of 2024.

Current focus in the UK market is on Easter deliveries. Our product is now well and truly on its way and we are holding a collective breath that current supply chain challenges caused by ongoing conflict in the Middle East will not lead to material delays, particularly for our chilled volumes that always carries the risk around shelf life given the distance travelled. The UK market in general has been quiet since the beginning of the New Year outside of our retail accounts and it is the same case for lamb in Europe, with customers buying hand-to-mouth to limit their exposure in a challenging environment. It has been interesting to watch the spread of farmer protests across the continent in recent weeks, as the pressure from increasing regulation in Europe starts to reach breaking point. It is not clear if politicians in Brussels will listen – European farmers have a long history when it comes to this sort of action – but it highlights the underlying tension across many European economies, which is impacting not just farmers but also our customers and their consumer base. As such the outlook in Europe for lamb and beef remains challenging.

In Japan, our retail beef business is steady but flat, with consumers trading down where possible and lower prices for domestic beef making life difficult for imported product. Industrial action at the major ports in Australia has led to some significant gaps in lamb supply from our Australian competitors over recent weeks. This has presented some spot opportunities for ANZCO product, but in general market sentiment for lamb remains weak across both retail and foodservice channels, and this is likely to continue until the change in seasons.   

So, in summary, very little change across global markets since the end of 2023, with more upside potential on beef given the situation in the US, while lamb markets will likely stay slow but steady for the foreseeable future.

Just a reminder that ANZCO Foods will be in Taupō in full force for ANZCO Foods IRONMAN New Zealand on the weekend of 2 March. We’re committed to telling New Zealanders about the nutrition and good health that comes from New Zealand’s finest beef and lamb, and our partnership with IRONMAN is proving to be a great way to share that story. We will also be in Wanaka for the A&P Show on 8 & 9 March. If either location is nearby, it would be a pleasure to see you there.