ANZCO Foods Market Update - November 2024

I am writing this month’s update on a plane home after a whirlwind tour through the US and UK during the past week.

I happened to be in Arizona, of all places, on election night. Admittedly based on a very small subset of largely middle-class men, there appeared to be a pretty positive reaction to the definitive win for Trump. While many of those questioned agreed that he is an ‘interesting’ character and perhaps not ideally suited to the role, there was a firm belief that he and the Republican party were far better suited to deal with the two key issues that Biden and the Democrats in their minds had clearly dropped the ball on – managing inflation and the border. The numerous conversations I had reinforced to me just how deeply people feel they’re struggling and revealed the significant impact four years of inflationary pressure has had on their wallets and overall quality of life. It will be fascinating to see how this particular issue gets managed under the new Administration…

In the UK I had the chance to meet with one of our major lamb retailers. They were reasonably upbeat about the prospects for the New Year in terms of demand for our product, driven by a slow but steady recovery in consumer spending, however politics was again a big topic of the day with the recent Labour party budget seen as a blow to business. That also flowed through to a general view on the UK beef and lamb sector, with the government’s planned polices seen as slamming farmers already under pressure. We have seen a decline in lamb numbers in the UK during the past year, which has led to very high domestic prices and growing demand and value for our own product, and the same is now happening with cattle. It feels like this is systemic and presents us with good opportunities for 2025 and beyond in this important market.

This was reinforced following meetings with our two major UK beef importers. Both are very keen to grow with us and are not afraid of the sort of pricing that we are starting to see for our prime beef cuts out of a tightening US market. They have been impressed with our quality and consistency, and the feedback from British chefs has been universally positive. While our sales strategy has been 100% focused on the UK foodservice sector so far, I would note that there was also some interest expressed during my visit around beef supply for retail, which again highlights the forward view around domestic production and pricing.

At a broader level global markets continue to trend in line with last month’s report.

The numbers out of the US industry continue to underpin a positive view of where the market is heading as we move into the new year.

China’s demand for lamb and beef has been improving, albeit at prices still behind our expectations in general. I believe it’s only a matter of time before they start to bring real competitive pressure back on the global marketplace – notably for beef – although it is inevitable that we will need to work through the usual Chinese New Year hangover before any recovery of substance becomes apparent.

Japan remains a struggle with strong domestic beef supply keeping prices low, and poor consumer confidence meaning demand for lamb in retail and foodservice is behind historic norms.

The Europe market is also relatively flat, with sales being driven by tight supply dynamics, particularly for lamb, rather than any sign of growing consumer confidence. Political and economic struggles in key markets such as Germany will only serve to keep our customers in a pessimistic frame of mind as we head towards the Christmas holidays.

So, some continued ups and downs on the scorecard when it comes to our market mix and certainly interesting times on the political front. For an exporter like ANZCO Foods, it is important we don’t overthink things, and simply stay focused on what we do, which is to bring our customers and their consumers nutrition and good health from New Zealand’s finest beef and lamb.

Finally, keep an eye out for our new Angel Bay breakfast patty, which we launched across New Zealand supermarkets this month. It’s flying off the shelves as we introduce Angel Bay to the breakfast table as well as lunch and dinner. This is a growing trend we’ve seen in other markets, and we’re excited to have Kiwis fuelling up on your beef to help them deal with whatever their busy day may bring!