Farmers Weekly NZ August 17 2020

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4 Woollen mask sales spike Vol 19 No 31, August 17, 2020

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Red meat warning Neal Wallace neal.wallace@globalhq.co.nz

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EAT companies are warning new season red meat prices are already under pressure as the lingering covid-19 pandemic creates global uncertainty. While there are tentative signs of improving demand from China, elsewhere world markets are generally weak as countries grapple with resurging outbreaks of covid-19 which is undermining consumer spending and confidence. Alliance Group sales manager Shane Kingston says the global decline in food service, weaker demand for pelts and growing competition from South American beef producers are all clouding the coming season. “We are not seeing any meaningful recovery in demand in that (food service) channel and are not likely to see any change through October to December,” he said. Pelt demand is also likely to remain weak due to less discretionary spending. Anzco’s sales and marketing manager Rick Walker says retail demand is driving a distinct differentiation between chilled and frozen lamb. “Things are slightly better for chilled, where a lot ends up in retail, and we are seeing good signals and demand for legs for the fourth quarter. That’s a positive,” he said.

AgriHQ senior analyst Mel Croad says a disconnect remains between what is being paid for store lambs and meat values. She says store lamb prices are $10 to $20 a head higher than the current lamb schedule, which drives an expectation schedules will have to improve to make trading margins stack up. “Any lift in the schedule needs to be matched with a solid lift in export demand, otherwise what does this mean for November (and onwards) when we get the flow of new season lamb?” she asked.

Disconnect remains between what is being paid for store lambs and meat values. Mel Croad AgriHQ senior analyst Sheepmeat is being buffeted by global uncertainty, highlighted in the latest market update from Silver Fern Farms (SFF). No sooner had the United Kingdom economy reopened, its Government begun talking of shutting it down again which SFF says makes forecasting demand impossible and is prompting customers to spot-buy products. Prices for UK lamb legs and lamb flaps are both below last year but have lifted slightly in recent weeks. SFF reports hotels in the Middle East are mostly shut or running at low occupancy, which means weaker sales into the foodservice

sector, while restrictions on weddings and gathering is limiting restaurant capacity and demand. The report says consumers are mostly staying at home which has driven a lift in chilled retail sales. In North America the effects of the pandemic are worsening with restrictions impacting restaurant trade and food service, affecting cuts such as French lamb racks. In 2018-19 they were selling for over $35/kg but in 2019-20 prices are closer to $20/kg. “We’re doing well on US retail products, but logistical challenges mean we’re slightly behind normal levels despite strong demand,” states the SFF report. One bright spot is China, where growing interest is expected to lead to stronger demand and higher prices which SFF expects to flow through to other southeast Asian markets. Demand for grinding beef in the US is firming and helped by a 23% decline in imports from Australia in July as it rebuilds its herd. US import bull beef prices are steady compared to a year ago, while in Europe demand for chilled steak cuts looks promising. Uncertainty with the European restaurant trade is impacting demand for chilled venison with many still having unsold frozen products, but demand from China is improving. Walker says Christmas demand for lamb from UK retailers is consistent with last year, and retail demand for chilled lamb and beef in Japan and chilled beef in North America is positive. Prices in China have plateaued,

Foundation to train women in agriculture

EMPOWERMENT INITIATIVE: Laura Douglas is bubbling with passion and enthusiasm as she heads up an exciting new venture aimed at giving women a leg up into New Zealand’s agricultural industry. See story page 26.

especially for lamb flaps which underpinned rising lamb prices last year. Walker says the challenge for the next six months is to encourage

consumers to buy meat and a big driver of that will be striking a price they are prepared to pay. Continued page 3


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