Monthly Market Insights
May Recap
Welcome Angel Bay Distributors, to your new one-stop-shop webpage dedicated to providing you with current market insights on beef and lamb nationally and internationally, with a focus on shipping freight and pricing trends. As a distributor of high-quality meat products, we understand the importance of staying informed about market trends and fluctuations to make informed decisions and optimise business operations.
Our goal is to provide you with timely and accurate information on the latest market trends, pricing, and shipping issues affecting the beef and lamb industry. Stay ahead of the game and make informed decisions with the help of our market insights.
ECONOMIC OVERVIEW
The global economic outlook is weak due to high inflation and uncertainty. However, New Zealand's key red meat markets are wealthy countries that can weather the difficulties better. China is dealing with exploding infections, making it difficult to analyse. Tight gas supplies in Europe have heavily impacted populations and pushed up inflation.
New Zealand's primary sector exports have been robust, but a slowing economic recovery and high inflation in key global markets could slow New Zealand's own recovery. The Reserve Bank of New Zealand is managing inflation by increasing the Official Cash Rate and pursuing monetary tightening, which will continue throughout 2023.
BEEF MARKET OUTLOOK:
- The global beef market outlook is positive due to strong demand, a lower exchange rate, and a favourable demand-supply balance.
- However, Australian, and Brazilian beef exports in 2023 may put pressure on New Zealand's beef exports in key markets.
- Positive BSE cases in Brazil may create opportunities for New Zealand's beef exports to China this season.
- Export revenue for beef and veal in 2022-23 is forecasted to be $5.04 billion FOB, which is an 8% decrease from the record high of 2021-22.
- The decrease in export revenue is due to a 0.5% decline in the volume of beef exported and a 6.1% decrease in the average export value.
LAMB MARKET OUTLOOK:
- New Zealand's lamb and mutton exports are looking positive despite a weak start in the 2022-23 season.
- Lamb export receipts are forecast at $3.54 billion FOB, down 12% from the previous year due to weakened demand and increased domestic supply.
- Strong consumer demand and limited global supply are expected to recover demand for lamb exports.
- The average FOB value per tonne for lamb exports is expected to be $11,600, dropping 11% from the previous year but remaining 6% above the average of the previous five years.
- Mutton exports are expected to recover, but total mutton meat exports are expected to decline by 3.9% to 89,100 tonnes with a decrease in average value by 15%.
- The market for mutton is expected to recover once China gets over its pandemic hurdles.
Global sheep meat trade:
The future of the global sheep meat trade is uncertain for 2022-23 after a record-breaking year in 2021-22. Prices fell as supply increased and demand from China weakened. However, export performance is expected to improve due to limited global supply.
The food service sector's revival increased demand for luxurious meats like lamb in 2022. But high prices and inflation may impact consumer demand in 2023. Australian exports are predicted to increase, which may put pressure on New Zealand lamb. However, market diversity between the two countries will likely limit the impact.
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ANNUAL PRODUCTION AND TRADE, 2018-2020 AVERAGE |
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New Zealand |
UK |
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Production |
449,933 tonnes |
307,667 tonnes |
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Total Exports |
393,995 tonnes |
87,275 tonnes |
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Total Imports |
2,994 tonnes |
65,197 tonnes |
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Source: Defra, USDA, Beef + Lamb New Zealand, HIS Maritime & Trade – Global Trade Atlas |
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GLOBAL BEEF TRADE:
By the end of 2022, New Zealand beef exporters had favourable market conditions, with prices remaining above historical averages due to tight global supply and import demand. In China, beef consumption is expected to continue to rise despite the increasing pork supply.
Global beef production is expected to decrease by 1% in 2023, with elevated cattle prices and feed costs remaining a challenge for meat production margins. The key challenges for the global beef trade in 2022-23 include labour shortages, geopolitical relations, and the risk of a new variant of the disease.
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ANNUAL PRODUCTION AND TRADE, 2018-2020 AVERAGE |
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New Zealand |
UK |
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Production |
704,000 tonnes |
917,666 tonnes |
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Total Exports |
448,385 tonnes |
118,935 tonnes |
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Total Imports |
6,738 tonnes |
253,884 tonnes |
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Source: Defra, USDA, Beef + Lamb New Zealand, HIS Maritime & Trade – Global Trade Atlas |
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