Market Update - March 2023
Posted on Wednesday, 15 March 2023 under Latest Edition, Market Updates
This month’s market update may be the shortest on record, as the reality is that very little has changed since my last report in February.
Global markets largely remain in a funk. Prices have certainly stabilised, which is positive, but across key markets such as the UK, Europe, and Japan, as well as the US lamb market, general sales activity is struggling to get out of second gear. There is a lot of water to go under the bridge before we can definitively claim that markets are recovering from the tough conditions that we have endured during the past six months. With bigger issues driving our markets, such as global inflation, the war in Ukraine, and even the unwelcome news of bank failures in the US, it is hard to see that consumer confidence will rebound in the near term.
Likewise, China is still a work in progress when it comes to its much-anticipated economic revival, and associated recovery in demand for beef and sheepmeat. Imports are still flowing into the country, but we are waiting for that spark that sets China back on fire, which will underpin global demand and pricing for our product as the year unfolds. I still believe that this is simply a question of time, and that patience is required as our customers work through existing inventories, and consumers get back to doing what they do best – spend money. March is still part of that traditional post-Chinese New Year window where it is not unusual to see a slowdown in buying activity. All eyes will be on April and May for signs that things are back on track!
As noted last month, the US beef market is ahead of the pack when it comes to officially entering the recovery phase. Prices for manufacturing trim have continued to slowly but surely improve in recent weeks and we fully expect this trend will continue as the US enters spring and looks ahead to the summer grilling season. However, it is important to note that prices are still well off what we were seeing this time last year. In one sense, this highlights the opportunity for further price increases in the coming weeks. Equally, it also reinforces the fact that the improving value we are seeing is not yet good enough, given the growing cost of doing business that we all face thanks to the impact of inflation. It will be essential that we do see US prices for manufacturing beef trend back up toward the US$3/lb mark in the coming months to reflect that change in our and your operating models.
Finally, a note to say how much the ANZCO Foods sales & marketing team enjoyed being part of the Wanaka A&P Show last weekend. It was our first time in ‘enemy territory’ and it was great to meet so many ANZCO Foods’ suppliers who are based in the bottom half of the South Island and are so loyal to the company. We certainly plan to be back there next year. The next stop for the ANZCO Foods’ marquee will be the South Island Agricultural Field Days in Kirwee later this month, so it would be great to see you there if you are planning to come along. ANZCO Foods also completed its first season partnering with IRONMAN New Zealand earlier this month. Our brand ambassadors, Braden Currie and Hannah Berry, had second place finishes in their respective races, and both had a great battle right down to the wire with the eventual winners. We also had one of our farmer suppliers from the Marlborough region, Kieran Hickman, join the ANZCO Foods team in Taupō to compete in his first IRONMAN half distance race. It was great to have Kieran involved and we will be offering the same opportunity for 2024 if you’re interested in making the commitment.
ANZCO Foods General Manager Sales and Marketing