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.
China/Brazil:
As we move into the second half of the year, both beef and sheep meat markets remain weak.
Demand in China continues to be quite due to high inventory levels and low consumer confidence. The volume of product customers still needs to work through adds to the low demand. Beef faces an even tougher situation with Brazil flooding the market with significant volumes with little issue regarding low prices.
Existing contracts are increasingly at risk as importers seek to renegotiate or even withdraw from previous commitments. Evidently, this puts pressure on exporters to fulfill orders promptly to avoid disputes. The timing of any market improvement remains uncertain, but it is crucial to restore prices and balance global demand.
UNITED STATES:
The US market has not changed significantly since last month’s report, but there are indications that demand, and prices may pick up soon. There's a noticeable decrease in the number of cattle moving through the US supply chain, resulting in record-high steer pricing, which negatively affects processor margins.
Beef exports from the US have also been impacted:
- • Volumes down 15% year-on-year in June.
- • Frozen beef inventory levels are tightening.
- • Wholesale and retail pricing is on the rise.
For New Zealand beef exporters, pricing for US domestic 90's is straightening out, indicating potential for increased demand and pricing for imported lean beef.
The recent summer rains in key states have benefited the corn crop, leading to the possibility of cheaper feed for the cattle industry and a widely anticipated herd rebuild, tightening various indicators mentioned earlier.
However, the immediate market situation remains sluggish across major product groups such as:
- • Chilled and frozen lamb
- • Premium chilled beef
- • Frozen manufacturing trim
Although, prices still generally outperform other market options.
GLOBAL SITUATION:
Market challenges are not unique to the US and China. While UK retail demand remains stable, frozen lamb demand in foodservice and food manufacturing is poor. In Europe, both lamb and beef demand are weak, particularly in Germany.
SEA markets are oversupplied with cheaper Australian products, limiting opportunities for New Zealand exporters. Japan is also experiencing minimal demand for both beef and lamb in retail and foodservice channels, influenced by the ongoing global economic condition.
Exporting beef and lamb is currently challenging, as reflected in livestock prices. A combination of factors, including reduced US cattle production, inventory rebalancing in China and other parts of Asia, and a shift in consumer confidence globally, is necessary to restore balance in major markets.
Past month's market updates and insights can be found here.
