Table of contents
As mid-year approaches, higher carcase weights and an abundance of feed have improved the beef and lamb market. External factors including significant weather changes continue to affect pork, poultry and parts of the seafood industry. Staff shortages are beginning to ease across Australia, allowing businesses to keep up with supply and demand. Sea temperatures have affected salmon and barramundi markets, with an increase in temperature expected to improve the total biomass over the next few months. Demand for scallops, mussels and oysters remains firm and consistent in the flow of products in factories.
Market developments according to MLA, Finco, Bindaree and Australian Pork.
The Australian market is currently experiencing extremely high feed grain prices. This is affecting several proteins, as well as an increase in feeder cattle prices.
Pricing is expected to be high until August, with a slight change expected for spring.
Compared to this time last year, average carcase weights are 10.8 kilograms heavier. Key factors that have led to this increase are; high cattle pricing, improved conditions with an abundance of feed and an increased proportion of cattle being sourced from the feedlot sector.
Lamb production has increased and carcase weights are up from this time last year. The average lamb carcases are coming in at 25 kilograms per head, making them 491 grams heavier than last year.
Lamb supply is expected to be consistent in the coming months, with slaughter expected to remain smooth across the breeding season.
After May’s short production weeks, processors are now clearing the backlog after holding the lamb for a little longer than what they normally would.
As labour resources continue to improve, pricing should begin to stabilise with the herd in good shape and lamb trade pricing only rising slightly.
Volatile weather has played a major part in disrupting not only transportation but businesses being affected by flooding.
Japanese Encephalitis virus has also started to affect livestock numbers coming through. Litters have been affected, with stillbirth numbers rising.
Supply tracking has been steady however, still quite tight based on current baselines.
Issues affecting the market at the moment are COVID-19, cost of grain and weather. These factors are contributing to the current high pricing in the market. It is unknown when the pricing will stabilise again.
The back end of the bird is still in high demand.
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.
Norweigan salmon prices will remain high during the next coming months however, good growth and less demand should see prices decrease towards the end of the year.
Warmer sea temperatures and an increase in salmon feed consumption are expected to improve growth rates, increasing the total biomass.
The currency exchange rate of the Australian dollar to the Norwegian krone has been favorable however, increased feed, packaging and freight costs are driving prices higher.
With the number of smolts put to the sea increasing year on year, there is an indication that there will be higher production capacity in the new year.
Local Wild Caught
Typically, throughout the winter months there are significant temperature fluctuations, mainly due to monsoon activity. During May, sea temperatures plummet up to 8 degrees in some places causing fish to hibernate.
Once the barramundi adapts to the colder conditions, it is expected that catch rates will improve over the coming months.
Taiwan barramundi raw material supply continues to fall short of market demand, leading to prices remaining high.
It is anticipated that shortages will be experienced until year-end, with volume predicted to be lower than 2021.
The new batch of small fish will not be ready for harvest until early 2023.
It seems there will be little pricing relief as a result of the ongoing raw material shortage and increasing feed, packaging and freight costs.
Basa prices remain at record high levels however, they have started to stabilise.
Continued high fingerling processing and shipping freight costs have also maintained upward pricing pressure.
Stable pricing is soon to be expected, based on recent contracts and subject to a stable Australian dollar until the first quarter of 2023.
Peru scallops are being shipped to the United States at very high prices. With prices increasing 100% from the lows of 2020/2021, little of the product has landed in the Australian market. With the high cost of Peruvian scallops, Tasmanian scallop meat now in season is looking to be comparatively good value.
Canadian-Frozen at sea
The Canadian scallop fishery is ongoing, with catch rates and sizes on par with other years. There is a bit of a shortage on the largest scallops (u10s), but otherwise, supply of 10/20s and 20/30s appears to be expected.
Local - Queensland
The season has finished due to extremely poor catch rates and stock levels.
Florida lobster season closed as of 31 March with minimal inventory remaining and most fishermen having removed pots from the water well before the season ended.
Thailand whole cooked
Prices for whole cooked prawns have softened, and new contracts are being finalised. New-season stock is expected to arrive in mid-July.
Due to additional cost pressures, prices will be marginally higher than in 2021.
Raw prawn cutlets/meat
The primary harvest season in Vietnam and Thailand has commenced with prices stable.
The rainy season starts in May and will directly affect the growth rate and health, causing some challenges for the prawn farmers.
Prices are higher than in 2021, mainly due to increasing global demand.
The current season is similar to 2020 and 2021 seasons, with low catch rates due to the lack of rain. As a result of low catches and high fuel costs, most boats have stopped fishing before the season end. Prices are expected to remain high throughout the calendar year.
Gulf Tiger Prawns
The new tiger prawn season will commence in the first week of august however, due to biomass assessments, it has been determined that catches will be low.
In addition to this, the season will be shortened by one month, closing on 31 October. Therefore, high prices are expected.
Moreton Bay bug catches are low, and prices remain at relatively high levels. Cooked or raw Western Australia lobsters are a good alternative.
New Zealand fish supply
There is increasing global demand for hoki and blue grenadier from customers outside of Australia and New Zealand, at prices that have increased 15-30% from the previous price peak.
Hoki has seen a lack of production capacity globally for single frozen, which has driven the most significant increase.
Year to date, supply on hoki has been tight however, with strong domestic and international demand, an early commitment to new season catch and out into 2023 is expected.
New Zealand Mussels
Demand is very strong, driven by a lack of supply due to labour shortages in New Zealand and strong demand as Europe, the United States, and the Middle East bounce back from COVID-19. As a result, demand has increased, with prices expected to remain strong until the season ends in July.
A shortfall in supply between August and November is expected when the new season harvesting will begin. Supply shortages may last into 2023.
The catch seems stable over the two separate fishing seasons, and prices are two and half times that of gigas. Most of this is being sold in Japan, where it is prized and fetched for reasonable end-user prices.
Market developments according to World Potato Markets:
COVID-19 has led to a boost in retail potato sales across the world however, the re-opening of foodservice outlets and rising costs have led to a lowering of demand.
The European Union crops remain under pressure from the weather. Recent rain may begin to alleviate dry conditions.
Netherland and Belgian potato prices are still rising which will add further financial strain on importers to Australia.
Most processors will have a substantial part of their crop under contract but there will always be a component that will be bought on spot. This usually lies in the region of 15-30% depending on the season.
Market developments according to Mauri ANZ:
FOB PNW US hard wheat slumped US$20/T whereas, the French kept rallying up US$25/T. July 2022 and January 2023 ASX futures are unchanged at $469 and $471/T. The A$/US$ rallied almost 2c to $0.703.
United States markets fell back after continued well-below average export sales. Bearish news flowed with India stating it would consider modifying its ban for in-need nations and permit already loaded ships to sail.
Crops in Russia and Ukraine are looking very good, with Russia seemingly unhindered by financial sanctions and exporting good volumes.
Crops in Western Europe continue to deteriorate and most will be beyond recovery within a month. The International Grains Council’s monthly supply and demand update has major exporter’s supplies shrinking 10% (6MMT) from last year.
ASX January 2023wheat futures peaked at $498 before following global values. The late-week retreat brought out more sellers of old crop wheat, but new crop selling remained relatively quiet.
Dry weather saw planting continue, with now over 70% complete. The very dry South Australian cropping regions will see germinating rains for the dry sown crops, more will be needed to ensure seedling establishment.
Northern New South Wales and South Western Queensland have suffered some waterlogging but should see almost all wheat sown within the optimum window with a full profile of moisture.
Freight shortages continue to plague East Coast exporting, with numerous vessels leaving short loaded.
Market developments according to Anchor Food Professionals Global Dairy Intelligence Group:
Imports and exports
Milk production for the past 12 months was down 2.6% on the year prior. New Zealand’s milk production decreased by 1.9% on a litre basis.
Warm and dry conditions early in the month were replaced by significant rainfall in the North Island, benefiting pastures and production, while the South Island experienced dry and more unfavourable growing conditions.
Dairy exports were flat compared to the same period the year prior. Stronger shipments of skimmed milk powder to South East Asia and Libya, and butter and fluid milk products to China, were observed year on year but offset by lower shipments of whole milk powder to China.
Milk production for the past 12 months was 2.1% lower than the year prior. Production has continued to decline year on year, impacted by below-average rainfall and higher input prices.
Dairy exports have increased 29.9%, or 20,941 MT compared to the same period the year prior. Exports continue to be high year on year, driven by high demand from China for fluid milk products, up 18,903 MT. Increases in skimmed milk powder and other powders exports were also observed.
Milk production for the past 12 months was 0.8% higher compared to the same period the year prior.
Average herd sizes remain small but have started growing again for the second consecutive month. Cost-saving initiatives in response to high feed costs are limiting milk yield per cow growth.
Dairy exports increased 0.1%, or 211 MT, compared to the same period the year prior, which was a record exporting month.
There was an increase in demand for lactose in China and Pakistan, cheese in Mexico and Japan and butter in Canada. This was largely offset by lower shipments of skimmed milk powder due to port congestion, shipping challenges from California and smaller volumes of whey to China.
Milk production for the past 12 months was down 0.1% compared to the same period the year prior, driven by declines in Germany, Netherlands and France and offset by increases in Italy and Ireland.
Rising input costs, low-quality silage and a focus on animal welfare in Germany, as well as incentives from the Dutch Government to livestock farmers to relocate or exit the business to reduce carbon footprint, are impacting total European Union production. This was offset by an increase in Italy, Poland and Austria’s production.
Dairy exports decreased 5.6%, or 30,532 MT, compared to the same period the year prior. Lower exports of fluid milk products, skimmed milk powder and whey to China, were partially offset by an increase in cultured products.
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.