Table of contents
Progressing through the year, seasonal conditions and above-average rainfall have influenced Australia’s meat market significantly. Cow fertility and an abundance of grain has led to a boosted confidence in beef. The lamb cohort is bigger than the five-year average however, pork and poultry have seen supply issues. The majority of seafood industries are slowly seeing staff shortages improve from COVID-19 impacts. Price increases across the majority of seafood have been due to increases in demurrage charges, prices of fuel, and growing international demand. Russia’s invasion of Ukraine and Australia’s heavy rainfall are pushing wheat and some vegetable oil prices to new record highs whilst also affecting supply. Significant volumes of wheat have been traded domestically, along with new crop liquidity picking up. Labour availability is continuing to impact milk production supply chains across Australia.
Market developments according to MLA, Finco, Bindaree and Australian Pork.
Australia’s beef herd is set to grow by 1.1 million head this year with a growth of 4.2%. Favourable conditions from the past 2 years have helped boost cow fertility, leading to a boosted confidence in the industry.
Widespread rains have resulted in abundant grain and pasture, meaning most producers are retaining the majority of their stock to build their inventory.
The ongoing weather in Queensland in 2022 will have a significant impact on cattle prices and supply throughout the year.
Cattle slaughter in 2021 was at its lowest level in 35 years, falling 16% from 2020 levels. In 2022, the slaughter is expected to increase by 11%.
As a result of above-average seasonal conditions, carcase weights have risen significantly since the 2019 drought. Carcase weights are also being driven by prices and the increase in grain-fed beef production.
Pricing currently reflects the unstable environment the supply chain is facing. Cattle prices are at record highs and are constantly changing. This is making the adaptability of processors the key to success.
Slaughter numbers have been higher than predicted, as many lambs currently hitting the market would have traditionally hit in January and February. This was not possible due to restrictions on processing capabilities.
There is typically a lull during Easter however, the lamb cohort is bigger than the five-year average as processers make up for reduced slaughter from earlier in the year.
Continued strong seasonal conditions across key sheep-producing states of New South Wales and Victoria were also key drivers in boosting the flock’s growth.
With an influx of lambs expected to hit the market in mid-2022, slaughter volumes are predicted to reach 21.6 million head during 2022.
Sheep slaughter is expected to reach a 17.6% increase on 2021 levels. This is setting up production to increase in the next few years heading for record levels.
The pork industry has been dealing with several issues along with staff restrictions.
The African Swine Fever outbreak in China in 2021 is still heavily affecting the market. The industry is still in recovery from the start of 2022, with supply volume down 10% compared to previous periods.
Recent flooding in New South Wales and Queensland has affected the number of boning birds available in the market.
The reduced supply is affecting pricing. Pricing will continue to remain high due to increased costs of packaging and transport fuel levies.
All information provided is correct at time of submission and is subject to change due to unpredictable circumstances. Adverse weather conditions, currency fluctuations and other market influences, which are difficult to predict accurately, can impact pricing and supply on very short notice.
Water temperatures are expected to remain below average. The cold winter and reduced salmon feed intake are directly impacting existing biomass.
The overall available biomass has also been reduced by strong demand, leading to high harvest volumes.
The demand for salmon from Norway, the UK, and the Faroes has been high, due to reductions in salmon output from Chile.
As a result, prices remain at high levels and are expected to continue until mid-year. Prices are not expected to drop to 2021 levels.
Raw material supplies continue to fall short of market demand with prices remaining at high levels.
It is anticipated that shortages will be experienced until the end of the year, with volumes predicted to be lower than in 2021.
Some supply improvement is expected around May, but will still fall short of current market demand.
It is predicted that there will be little pricing relief as a result of the ongoing raw material shortage.
Prices sharply increased after the Vietnamese New Year by approximately 37.5% due to raw material shortages.
Increased processing and higher shipping freight costs have also contributed to rising prices.
Together with growing international demand, there are few immediate signs of the situation improving, with prices expected to remain high throughout the year.
South American Flathead
Supply is being influenced by seasonal drop-off, resulting in the majority of catches yielding smaller sizes.
Prices have increased to cover the high cost of sea freight currently impacting all imports.
This situation has caused the fishing fleet to re-direct its catch effort to prawns.
The only sales made have been from the minimal product being shipped to the USA. The last amounts that have arrived in Australia are being sold at extremely high prices.
Prices remain very high with most of the frozen in-shell stock being shipped to China for reprocessing.
Prices continue to increase along with delays, leading to demurrage being charged by shipping companies.
Prices of both roe-off and roe-on have risen considerably, due to continual increases in shipping costs. Despite delays, there are no raw material supply shortages.
Canadian - frozen at sea
Canadian scallop fishing is progressing with good catch rates and a regular pack mix. The Canadian quota will be down in 2022, as expected, by 500 MT. US supply is also expected to be reduced.
This reduced supply and regular to strong demand, has continued to push prices up in all markets.
Prices may soften slightly when the new US season begins, but it is anticipated that this will be for a short period in the Northern spring. Strong prices are anticipated towards the end of the year.
Local - Queensland
The Queensland scallop fishing season has begun, with the grounds that were open yielding minimal volume.
It is predicted that there will be limited landings of QLD scallops for the remainder of 2022.
The remaining 2021 stock is limited, and prices are at record high levels.
Winter fishing in LFA 33-34 has not been ideal and catches have been low. This has been due to weather delays, and rising fuel and bait costs mixed with inflation, making it challenging for fishermen to harvest.
Shore prices have skyrocketed. While China has continued buying steadily, many North American wholesalers and restaurant owners have been removing lobster from their menu.
Inventories are low but there are some lobster meats and tails available at a reasonable price.
2022 Whole cooked production for Australia is predicted to be limited due to expectations of Chinese live lobster demand and European whole frozen interest. Labour shortages are also expected to continue.
Florida Lobster season has closed with minimal inventory remaining.
The new season for Brazil is scheduled one month earlier than 2021. Increased minimum sizes may eliminate the production of the cheaper 4oz size tails which are predominantly shipped into Australia.
There is still uncertainty whether the new size limits will be endorsed for the 2022 season.
Increasing interest from Australia should see additional whole cooked production in the coming season, with size targets of 350/400, 400/460, and 460/520. Most 520g+ sizes are likely to be directed to China while 5oz+ tail prices are expected to remain extremely high and directed to US markets.
Western Australia Lobster
The Chinese demand for live lobster remains weak due to recent COVID-19 outbreaks.
Direct channels from Australia are still blocked, with little opportunity for beach prices to jump as per the typical winter spikes of previous seasons.
Domestic Australian whole cooked demand remains fair in the lead up to Easter, whilst the supermarkets maintain their continuous buying pressure for A sizes.
Taiwanese demand for whole cooked shipments by sea and air is maintaining a tight supply balance.
Labour shortages are a major obstacle to volume cooked production at this time and result in additional tail production.
Thailand whole cooked
Prices for whole-cooked prawns in Thailand remain strong. Prices are expected to soften however; high freight costs will mitigate any price reductions.
Raw prawn cutlets/meat
Vannamei prawn cutlets and meat prices have started to soften. However, there has been an increase in freight fees and packaging costs.
It is anticipated that there will be further price reductions mid-year.
East Coast and Torres Strait Tigers and Kings
East Coast tiger prawn fishing has commenced north of the 22nd-degree line, just south of Mackay.
Catch rates are currently low with mainly small sizes being caught.
The prices for the new season catch of East Coast king prawns have been steady, with some areas producing 10/15 and U/10 coupled with smaller amounts of U/8 and U/6 sizes.
Prices have come back from Christmas levels.
Southern King Prawns
The first fishing effort of 2022 yielded low catches with very few large grades in the mix.
The Gulf of Carpentaria banana prawn fishing season has begun. Early assessments indicate that there will be a similar season to 2021 with low catches.
The 2021 season is closed, with catches below 50% of the 2020 season. As a result, there is little or no inventory, and prices are at a record-high level.
The new season will commence in August 2022.
Moreton Bay bug catches are low, with prices remaining at high levels.
New Zealand fish supply
Hoki season in New Zealand is due to commence, with product landing around August.
The total allowable catch has been set precautionarily low, whilst yields remain stable.
New Zealand Mussels
COVID-19 related interruptions have severely impacted processing, leading to supply being restricted.
As a result, demand has increased. Prices are expected to remain strong until the season ends in July.
New Zealand Oysters
Significant COVID-19 impacts have been experienced. Lower than normal staff numbers on the barges, farms, and factories have resulted in longer fulfilment times for customers.
These delays are starting to improve as staff return to work and the consistent flow of products in the factories improves.
Later production has led to a better size mix, including large and jumbos in upcoming containers.
Improvement in the supply is expected across the next couple of months.
Catches have been steady however; Australian buyers seem to be exchanging Argentina squid for New Zealand squid or gigas.
The majority of squid is being shipped to the European Union.
New Zealand Arrow
Catches of small grades have commenced, with sell prices of the raw material to the European Union and China, showing a marked increase.
This has been driven up by the increased levels of Californian squid, which is of similar size and is popular in Southern Europe.
Sharp price rises are expected for larger squid when landings commence.
Japan Common (Todarodes)
Catches have been around 30% of what was anticipated. Prices have escalated with Japan purchasing the bulk of the catch.
Catches by Chinese jigging vessels and trawlers have been high, with no shortage of raw materials.
There has been a considerable price increase on whole round gigas due to the big hit taken by long-distance vessels with the increase in the cost of fuel.
There has been a recent increase in finished products, as well as raw material supply to other countries. The same increases have been experienced in Peru.
Market developments according to World Potato Markets:
The turmoil caused by Russia’s invasion of Ukraine continues to dominate the potato market. The crisis has pushed wheat and some vegetable oil prices to new record highs.
Prices have been driven by an expectation that plantings and output will be lower this year because of high input prices and more attractive alternative crops.
Australia’s potato production has risen by 5% over the past year providing an extra 70,000 tonnes. This has led to the value of the Australian potato now being worth more than AU$800 million.
January heavy rainfall and hail in Ballarat, one of Victoria’s main potato growing regions, are expected to reduce supply over the coming year. This region provides nearly half of Victoria’s potatoes and up to 95% of the crop has been affected. Between 20% and 70% of yields could be threatened which will cause problems for processors and growers.
Market developments according to Mauri ANZ:
Australia Bureau of Agricultural and Resource Economics have raised their forecast for Australia’s 2021-22 wheat crop by 1.9MT to a record large 36.3 MT in its latest assessment.
With significant volumes traded, the electronic trading platform reported record volumes. It was very difficult to get an offer or a bid from the trade with grain prices moving so much.
New crop liquidity is picking up, particularly in New South Wales and Queensland where soil moisture is excellent with the sowing window opening.
La Niña increases the likelihood of tropical cyclones within the Australian region, as well as increasing the chances of above-average rainfall across large parts of eastern Australia during Autumn.
FOB PNW US hard wheat fell US$9/T, French eased US$3/T. ASX May 22 futures were unchanged @ $394 and January 2023 A$2 down to $403 in skinny volumes. The A$/US$ rose 0.5c @ 0.741.
Markets rallied again with Russia invading Ukraine, resulting in the closure of Ukrainian ports. Some grain vessels are reportedly being attacked and uncertainty over the ability of Russia to conduct financial transactions when selling grain.
The Chicago Board of Trade wheat and corn contracts closed higher on the Russia-Ukraine supply disruptions. CBOT wheat futures soared by the daily limit to their highest level in almost 14 years.
The conflict may also limit the ability of Ukrainian farmers to fertilise their winter wheat crops and plant their spring wheat.
Market developments according to Anchor Food Professionals Global Dairy Intelligence Group:
Imports and exports:
Milk production was down 0.7% from the previous year. Warm and dry weather across most regions has impacted soil moisture and milk production.
Exports were up by 4% or 135,499MT. This was primarily driven by increases in WMP, fluid milk products, and cheese.
Milk production was 0.9% lower than the previous year. COVID-19 outbreaks and isolation requirements are impacting labour availability and supply chains. Early drop-offs, sustained cull rates and reduced milking intervals are negatively impacting milk production.
Exports were up 18.8% or 141,673 MT. This was primarily driven by increases in fluid milk products, SMP and WMP.
Milk production was 1% higher than the previous year. Weaker production was observed. This was driven by continuing herd size contractions and lower milk per cow. This was reflected in increased input costs.
US dairy exports decreased 2.7%, or 5,247 MT compared to the same period the previous year. Lower demand for WPC in Indonesia was partially offset by an increase in cheese in Japan and lactose in china.
Milk production was down 0.1% compared to the previous year. Lower production volumes year-on-year were driven by Germany, France, and the Netherlands but partially offset by an increase in Italy’s production.
Exports were up 0.2% or 15,617MT. This was driven by increases in fluid milk production, whey, and partially offset by declines in infant formula, cultured products, WMP, and butter.
All information provided is correct at time of publication and is subject to change due to unpredictable circumstances. Adverse weather conditions, currency fluctuations and other market influences which are difficult to predict accurately, that can impact pricing and supply. E&O.E
Anchor Food Professionals. (2022). Professional Prespective. The latest insites in global dairy markets, 10-11.
World Potato Markets. (2022). Agri Markets Limited, 1-21.