MarketPULSE August/September 2021

Table of contents

Introduction

In regards to beef, COVID-19 is still effecting the market and shutdowns. However, the cattle herd continues on its rebuild where the eastern young cattle indications have soared above 1,000c for the first time. Heavier trade lambs are reaching 1,000c/kg cwt. In contrast, lighter trade lambs are trading at a discount and in some instances around 800c/kg cwt. Merino and heavy lambs are also trading at elevated levels. The pork market will continue to tighten with pig kill numbers starting to lower, due to seasonality. It will also start to affect pig weights with warmer months producing lighter pigs, resulting in less meat available as finished goods.

 In regards to Atlantic salmon, export is 14% higher than 2020. The current biomass is 5-7% higher than the same time last year which is underpinned by higher feed input. As a result, prices will start to soften. The first supply of the season for South American Flathead has arrived into the Australian market with supply generally in the smaller 2/4 oz & 4/6 oz sizes with very little of the most popular 6/8 oz size. Most major shrimp producing countries are currently experiencing severe impact due to COVID-19. Vietnam, India, Thailand and Indonesia have all been very hard-hit by the newer more virulent strains.

Meat

Beef

COVID-19 is still effecting the market and shutdowns. 

The cattle herd continues on its rebuild where the eastern young cattle indications soar above 1000c for the first time. 

Supply constraints are heavily focused around cattle security across all grades. There has been a slight reduction in pricing of beef as a result of the pressures of COVID-19 restrictions. 

These slight reductions will be short lived as cattle pricing and supply become tougher for producers, as well as the anticipation of markets waking up during the spring. 

Due to cattle producers holding off on liquidating stock to processors, the weights of cattle on feed increase which, in turn, is resulting in heavier primal to enter the marketplace as opposed to 18- 24 months ago. 

The cattle and beef market continues to challenge the status quo for both consumers and processors which is resulting in having to find alternative ways to continually adapt to these changes.

Lamb

The EYCI (Eastern Young Cattle Indicator) hit a new all-time record, breaking through the 1,000c/kg mark to hit 1,003c/kg cwt. It returned to below 1,000c/kg, sitting at 988c/kg cwt. At this price, the EYCI is still performing well and is 235c/kg above the same time last year.

Heavier trade lambs are reaching 1,000c/ kg cwt. In contrast, lighter trade lambs are trading at a discount and in some instances around 800c/kg cwt. Merino and heavy lambs are also trading at elevated levels.

Pork

The market will continue to tighten with pig kill numbers starting to lower due to seasonality. It will also start to affect pig weights with warmer months producing lighter pigs, resulting in less meat available as finished goods. 

 Pricing will continue to firm and increase. 

Poultry

It is very difficult to predict where prices are trending at the moment due to the COVID-19 lockdowns. 

There has been an oversupply of chicken products due to these lockdowns. As the restrictions are relaxed or removed, the demand will increase for enterprises that have been closed or working at reduced capacity. 

Bird producers at this time will be looking to increase the prices.

Aug Sept Newsletter Web Images MEAT

Seafood

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.

Salmon

Norwegian Atlantic Salmon

Export is 14% higher than 2020. The current biomass is 5-7% higher than the same time last year which is underpinned by higher feed input. As a result, prices will start to soften. 

Salmon production from Chile is down on expectations, resulting in slightly lower total global salmon output for the remainder of 2021. 

It is anticipated that prices will firm as Christmas and New Year approach. 

Barramundi

Local Wild Caught

Catches have extended through the winter months as predicted and stocks into the market have been good up until now. 

 

Market feedback suggests quality has been excellent and packaging improvements such as grading fillet weight are paying off for the industry. Foodservice in particular has embraced and welcomed this and are now able to rely on a continuity of quality with wild catch. 

 

Catches have been good to date but have started dropping away. East Coast catches will also start to drop away, as they do at this time of year. 

 

A number of fishers in the Gulf converted to catching other species such as Mackerel some time ago, now the last of the dual licence holders are off the Barramundi which will mean stocks leading up to the closure will reduce in numbers.

 

Imported

The effects of COVID-19 restrictions continue to impact the supply of imported Barramundi fillets, particularly in the 100/200 and 200/300 grades, which are now all but depleted with most importers. 

There has been at least a 30% reduction in available product compared to the same time last year and some farmers have now quit due to low profit levels and high risk. Raw material is still limited and prices continue to rise. 

It is anticipated that the supply situation will continue to be impacted if the raw material situation does not improve. 

Basa

Due to a dramatic increase of COVID-19 cases in Vietnam, all production areas are currently in lockdown. As a result, most of the processors have decreased production or temporarily closed down until the situation improves.

Flathead

South American Flathead

The first supply of the season has arrived into the Australian market with supply generally in the smaller 2/4 oz and 4/6 oz sizes with very little of the most popular 6/8 oz size.

Due to adverse weather conditions causing poor fishing, re-supply is expected to land in September-October. Overall, demand has increased for raw material for value-adding (beer-battered and crumbed variations).

Scallops

Peru

Product has been short with preference to produce roe-less scallops for the coming summer sales in the United States of America. 

Roe on scallops have been taking a very long time to complete and ship out. Along with the shortage, increased global shipping costs have seen pricing at very high levels.

The market appears to have accepted the increased pricing, given the current high levels in China.

Japan

Prices of current holding stocks have increased and shell stock is now being shipped to China at vastly increased prices.

China

Prices of roe on soaked scallops have increased even further. There are also lacklustre sales in Australia due to the various COVID-19 lockdowns.

Canadian - frozen at sea

Volumes have ramped up over the past couple of months with full anticipation of meeting the total quota harvest in 2021. Sizes being landed have trended slightly higher than last year but not significantly. Even though landings in the United States have been quite strong, prices have remained very firm and even increasing on the larger counts. It is expected that demands and prices will be firm for the balance of the year.

Local - Queensland

The local scallop fishery has basically finished and will not restart until November 2021. All product being produced is from limited frozen at sea scallop shell stock holdings. 

Sizes for large scallops are limited and all prices have increased.

Canadian Lobster

The spring hard shell fishery closed in July with high catch rates and strong prices paid across the board for whole cooked, raw tails and cooked meat. 

Even with all-time record prices paid, inventory remains light with good demand as markets await the start of a new season. Larger sizes from the east are still being directed to live markets with all others directed to meat and tail production.

Florida Lobster

The 2021 Florida Lobster season re-starts at the start of August. Chinese demand for both live and frozen lobster is expected to be strong as celebrations and major events resume. Hopes are for a return to typical catch volumes as most markets keenly await new season offers.

Western Australia Lobster

Western Australian Lobster continues to find a range of international live market channels for a limited supply around the slower catching winter period. 

The industry is still unlikely to see major catching volumes again until November/ December with the start of the ‘whites’ run. Until that time, frozen inventories for the local market are expected to be very limited.

Prawns

Imported

Thailand whole cooked

As a result of heading into the rainy season, the expectation is that the growth rates of prawns will slow up in coming months. The expected mix of grades will be 15/25 per lb making up about 45%, while the bigger sizes of U/10 and 10/15 pcs/lb will account for less than 5%. The bulk will be in the smaller 60- 120 pcs/kg size grades which are expected to account for 50% of the total quantity. 

COVID-19 has contributed to a shortage of local labour which means reduced capacities from factories. We predict prices for this period to remain at medium to high levels, due to COVID-19.

Raw prawn cutlets/meat

Most major shrimp producing countries are currently experiencing severe impact due to COVID-19. Vietnam, India, Thailand and Indonesia have all been very hard-hit by the newer more virulent strains.

Vietnam is one of the major producing countries for Australia’s value-added prawns. Due to the outbreak, many processing facilities have been forced to close and some of the major producers are able to operate at only 20% capacity. 

Many of the smaller contract prawn farmers are harvesting their prawns early so that they get a financial return for their crop. 

As a result, a shortage in supply and firming of prices is expected between now and the end of 2021. This will be further exacerbated by the weakening of the Australian dollar.

Local

East Coast and Torres Straight Tigers and Kings

East Coast Tiger catches remain at low levels, inventories are limited and Tiger prices remain high. 

East Coast King catches remain low and prices remain high for all grades. The industry will focus on cooked prawns for summer sales, therefore prices are unlikely to soften. 

In addition, there is talk of a closure for shallow and deep water trawling for 6 to 8 weeks from September, likely to cause further reductions in supply.

Banana Prawns

The second half of the Banana Prawn season has started. Inventory is at low levels and prices remain at record highs.

Bugs

Local Queensland

The bug season has not improved with limited stock prices remaining at record levels.

New Zealand fish supply

Hoki

Hoki season is now approaching the halfway mark, with new quota’s applying in the west coast fishery, down to a total allowable catch (TAC) of 95,000 MT, from last season’s TAC of 115,000 MT. 

As a result, some vessels have been re-directed to Tasmanian waters. Both grounds are fishing extremely well, producing good catches. 

Stock is plentiful across all size ranges and will continue to be supplemented by the additional landings from the Australian Blue Grenadier fishery.

Smooth Dory

Dory fishing finished at the beginning of the year, with the new season set to commence in late August. However, availability remains high across all sized fillets.

New Zealand mussels

Mussel season is now in a seasonal closure for around 6 to 8 weeks. 

Demand for mussels has continued to improve as restaurants re-open around the world, particularly in the United States of America. 

Upon re-opening in October, the demand should be strong, which could cause upward pressure on pricing.

New Zealand oysters

There is a good mix of sizes on the farms with the majority of stock in the standard to large size range with smaller quantities of jumbo and super jumbo. Factories are currently at 70% capacity due to the rainfall closures. Demand is strong across all markets, although supply to export markets is slow due to ongoing global shipping issues.

Squid

Argentina Illex

The new season for Illex catches has been positive. Despite this, prices have remained high. However, the market for Illex in Australia has waned as buyers have been purchasing Japan Common Squid, Gigas and New Zealand Squid.

New Zealand Arrow

The NZ Arrow season is over. Stocks remain in cold storage awaiting shipment to China, Australia and Europe. 

Increased freight costs, some more than double the costs of last year, are causing issues for future pricing of the value-added products.

Japan Common (Todarodes)

The season has commenced. The first catches are expected to be in the smaller grades, not suitable for the Australian market. 

Late August and October will see a huge fishing effort with a good season anticipated. However, this will be dependent on the water temperatures in the Sea of Okhotsk, East China Sea and also the Sea of Japan this year. 

Due to very hot summers experienced in Far East Russia, China and Japan, there is a fair chance that the squid biomass will be in areas further north.

Gigas

There has been a slight price rise on all of the smaller grades. The catches of the large grades are going very well in the inshore waters of Peru.

Aug Sept Newsletter Web Images SEAFOOD 3

Potatoes

Market developments according to World Potato Markets:

Snap lockdowns continue to be a feature of Australia’s fight against COVID-19, which means a return to the fry import levels of previous years is still some way off.

Continental Europe

Warm weather has helped the European new crop grow more strongly but there could be concerns that conditions are too dry if there is no rain by the end of the month. There is some support for prices in Spain and Portugal as supplies come under pressure. 

European old crop stocks are being eaten into with growers keen to sell before quality declines due to high temperatures.

Aug Sept Newsletter Web Images POTATO

Wheat

Market developments according to Mauri ANZ:

Domestic

Domestic wheat and barley prices strengthened with wheat leading the way. Current and future Australian prices are still more than competitive with United States export wheat prices.

marketpulse

Global

US futures for both winter and spring wheat finished slightly lower than the previous big numbers.

The rapidly spreading Delta variant of COVID-19 has left investors nervous of a renewed series of lockdowns that will lead to a protracted global economic recovery. This is inevitably adding pressure to the AUD which was relatively stable at 0.74c after dropping 2 cents in the previous weeks.

Canada’s spring wheat crop is in a similar situation to the United States spring areas. Yields are expected to
be at 15% below trend and possibly worse than 20% less than expected. This would put the final Canadian wheat crop in the 24-26 MT range compared to the USDA’s current estimate of 30.5 MT.

Aug Sept Newsletter Web Images WHEAT

Dairy

Market developments according to Anchor Food Professionals Global Dairy Intelligence Group

Imports and exports:

New Zealand

Exports increased by 3.6%, or 123,890 MT, on the previous comparable period. This was driven by WMP, fluid milk products and cheese but partially offset by declines in SMP and AMF. Total New Zealand dairy exports increased by 19.8%, or 52,355 MT.

Australia

Exports increased 10.2%, or 74,160 MT, on the previous comparable period. This was driven by increases in fluid milk products, SMP and butter but partially offset by declines in infant formula.

China

Imports were up 21.5%, or 684,569 MT, driven by fluid milk products, whey, SMP and WMP. Dairy import volumes increased by 1.3%, or 3,345 MT, compared to the same period last year. Volumes increased across most product categories. SMP and WMP imports hit record levels, sourced primarily from New Zealand and Australia.

Asia

Imports were down 0.5%, or 22,415 MT, compared to the same period the last year. Declines were recorded across WMP and whey and offset partially by increased volumes in lactose, cheese and SMP.

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

Aug Sept Newsletter Web Images DAIRY

References

  • A week of records and yearly highs. (2021). Retrieved from MLA Meat & Livestock Australia: https://www.mla.com.au/news-and-events/industry-news/a-week-of-records-and-yearly-highs/  
  • World Potato Markets. (2021). Agri Markets Limited, 1-18.