Table of contents
August and September had the highest beef export volumes since December 2019 and this increase in exports is set to continue until the end of the year and well into 2024. There has been a huge jump in grain fed cattle pricing compared to six months ago, though grass fed pricing is remaining consistent.
Lamb production in September was the highest it has been since April 2019 and with lamb about to move into peak time, it is expected that exports will hit historic high numbers. As the weather warms there are less pig numbers available for processing and pricing will continue to move up. Chicken processors are again predicting supply issues with demand for the back end of the bird, wings and thighs increasing.
In terms of seafood, Norwegian salmon prices have softened and pricing is expected to rise into the first quarter of 2024. Vietnamese basa producers have struggled with low demand and low prices over the past 12 months and this may result in a shortage at the end of the year. The Gulf banana prawn season finished up more than double the last two seasons and prices are low as a result.
Market developments according to MLA, Finco, Beef Central and APL.
August and September had the highest export volumes since December 2019 and this increase in exports is set to continue until the end of the year and well into 2024. This will continue to put pressure on the domestic market with more stock being exported and less stock available.
Cattle weights will be slightly higher moving into the warmer months. However, quality and finish of the cattle is the biggest factor in determining pricing. There has been a huge jump in grain fed cattle pricing compared to six months ago, though grass fed pricing is remaining consistent.
Lamb production in September was the highest it has been since April 2019. However, there have been mixed indicators recently with some lamb pricing increasing while other lamb production regions have eased.
Heavier lambs are now coming through processors which has helped boost production numbers even higher. This heavier stock will lead to pricing firming up. Lamb exports are about 10% higher than this time last year. With lamb about to move into peak time, it is expected that exports will hit historic high numbers.
As the weather warms there are less pig numbers available for processing which leads to decreased supply and increased demand. Pricing will continue to move up due to these normal seasonal changes. Producers are also being heavily impacted by supply chain pressures from increased cost of feed, energy, ingredients and transport.
Coming out of the colder months, chicken processors are again predicting supply issues with demand for the back end of the bird, wings and thighs increasing. Ongoing staff shortages and raising costs of feed and fuel are also continuing to put pressure on the industry.
Norwegian salmon prices have softened as predicted, yet remain above 2022 levels. The lower pricing is due to increased harvest volumes although available production capacity is the primary issue with supply. Pricing is expected to rise into the first quarter of 2024.
The New Zealand main hoki season is now coming to an end with FVs moving into targeting other pelagic species such as ling and orange roughy. There is little to no rollover of stock from the 2022 season with demand still outstripping supply. High input costs and food inflation uncertainty are still talking points within the industry. The Australian blue grenadier campaign yielded much larger fish, which is generally the expectation.
New Zealand’s main season will kick off around November. Demand remains extremely good with the Australian market taking to this species well with demand up 30%. This is largely due to increased prices and a lack of availability of other whitefish species. Supply expectation in volumes will remain solid, which should keep market prices stable.
Vietnamese basa producers have struggled with low demand and low prices over the past 12 months. In the long-term, farmers will cut back on total output and this will put upward pressure on prices. Another factor that could impact price is a return in demand from Chinese buyers. As a result of the low prices, some farmers have halted farming operations. This may result in a shortage of basa at the end of the year.
The main harvest period between May to August is now over with limited raw material currently being harvested. As a result, prices are starting to increase. Due to the low prices experienced this year, it has been reported many farmers have not restocked for the second harvest period between late October 2023 to February 2024. This could put further upward pressure on prices coming into the festive season and Lunar new year.
Prawns (local wild caught)
The Gulf banana season closed on 10 June finishing up above average with total landings of 6,300 tons – more than double the last two seasons. Due to high cold storage costs, major producers are under more pressure to move stock. As a result, prices are low and will remain so until an increase is seen in king prawn pricing.
A closure will impact eastern king prawn fishing from 20 September to 1 November. With weak demand, prices are expected to remain at lower levels. However, during this period prices should start to firm from the current lows.
The Gulf tiger prawn season commenced on 1 August and will close on 10 November. Catches have been poor as predicted, so some vessels have instead focused on the red leg banana prawns where catches have been relatively good.
The weather has been favourable for barramundi farming and this is expected to improve total farming output as Taiwan heads towards winter. The main sizes being harvested are 100/200 and 200/300 grade fillets. This may result in some improvement in pricing over the coming weeks.
Local (wild caught)
The local barramundi season closed at the start of October and catch numbers in the lead up were strong. With normal seasonal trends, catch numbers tend to drop off in the mid-winter months however this year’s weather conditions were perfect for barra reproduction.
The high-pressure system that sits above the Great Australian Bite at this time of the year has been the only stumbling block to this fishing season. Windy weather conditions during July and August made it hard to fish and caused damage to some vessels. However, by September, 100% of the Gulf fleet was back on the water ensuring good stores for markets in the off-season.
Canadian scallop fishery is progressing and winding down quickly. Catch rates have been very strong and so it is anticipated that most of the harvest will be completed earlier than usual by mid-October and the new season will then commence 1 January.
Supply is currently skewed to the larger sizes (U10s and 10/20s) with very limited stock of anything smaller at this time. With over 83% of US scallops now landed, a strengthening in demand and pricing in the US market is being seen and is anticipated to continue until Christmas.
Production of Peruvian scallops is heavily reduced and only roe-on in the shell at high price levels is available. It is hoped that production will now increase following a massive die-off caused by warmer water temperature early this year.
China has banned all imports of seafood from Japan due to the gradual release of radiation contaminated water into the sea. It is unknown how long this ban will continue as the release will be ongoing. It is suspected that this is likely a partially politically-motivated move.
The prices of roe-on and roe-off Chinese scallops have dropped over the last few months to a loss-making level due to very poor business conditions just about everywhere. These prices have now been somewhat increased after the Chinese government banned all Japanese seafood imports. As there is still substantial stock of raw material sitting in China, the processors holding these saw an opportunity of recouping some costs. There will be new regulations starting in early November regarding the importation of bi-valve shellfish which will be interesting to watch in the market.
The fall fishery for lobster in Canada is ongoing but landings are quite slow. Most landings are going to live trade resulting in limited inventories of frozen products at the moment. This will likely trend until the winter fishery that begins in early December where it is anticipated more product will go to the frozen segment. For now, frozen items are very limited and prices are quite firm.
Market developments according to Mauri ANZ.
- Markets across the east coast eased during September for no major reasons. Major trading companies reduced their new crop bids and feedlots seem to have adequate nearby cover. Growers are starting to kick out some of their wheat from last harvest in readiness for this harvest
- Comment from numerous regional traders at the Victorian Grain Trade Conference was that they have never seen growers so cashed up and not under any financial pressure to sell stocks. In Queensland, comment was that growers would be similarly cautious sellers this harvest for two different reasons – this year’s crop is shrinking in size and the dry weather is delaying the summer crop planting and in growers’ minds already cruelling yield potential
- In Queensland, it is expected that APH (high protein) will be exported on current market indications that APH export prices are greater than stockfeed prices into the feedlots. This is likely to increase the draw on H2 and lower grades of wheat from New South Wales
- Traders state that Australian new crop export indicative APW1 offers of US$315 (based on South Australian & Victoria track/ASX price of A$405) compared to French and Russian wheat of ca US$255 which is too expensive
- With smaller and reducing Australian crop, there is a lot less wheat to be exported than traders have been accustomed to the past three years
- Limited global trade has seen prices ease slightly. Russian wheat is rumoured to be trading US$10/T under the Kremlin official price, but last week’s Egyptian tender went to France and Romania. Russia continues to be the world’s largest exporter
- Margin between base grade EU-Black Sea wheat and high protein (13%) delivered Asian consumer is widening in the early stages of a disappointing Canadian harvest
Market developments according to Anchor Food Professionals Global Dairy Intelligence Group.
Australian dairy exports decreased 31.6%, or 24,767 MT, in May compared to the same period the year prior. The decrease in exports was driven by lower volumes of fluid milk products, cheese and SMP. Exports for the 12 months to May were down 25.3%, or 237,486 MT, on the previous comparable period. This was predominantly driven by decreases in fluid milk products, WMP, SMP and cheese.
Total New Zealand dairy exports increased 22.4%, or 56,336 MT, in June compared to the same period the year prior. The increase was driven by WMP, cheese and SMP. WMP exports increased due to China and Algerian tender fulfilments. SMP exports to China were more than double compared to the same period the year prior. Cheese exports to China hit a new record high compared to the prior year. Exports for the 12 months to June were up 6.0%, or 197,938 MT, on the previous comparable period. This was driven by increases in SMP, butter, AMF and cheese, and partially offset by decreases in WMP.
US dairy exports decreased 14.2%, or 39,174 MT, in May compared to the same period the year prior. The decrease was driven by lower export volumes of WMP and SMP to Malaysia and Indonesia, and cheese to Japan and Korea. Exports for the 12 months to May were up 2.6%, or 71,422 MT, on the previous comparable period. This was driven by lactose, cheese, whey and WPC, and partially offset by declines in SMP.
EU dairy exports decreased 2.9%, or 16,494 MT, in May compared to the same period the year prior. The decrease was driven by lower volumes of infant formula to China. This was partially offset by an increase in export volumes of SMP and fluid milk products. Exports for the 12 months to May were down 6.0%, or 405,070 MT, on the previous comparable period. This was driven by declines in fluid milk products, cheese and WMP, partially offset by increases in infant formula, SMP and cultured products.
Australian milk production increased 1.6% in May compared to the same period the year prior. Soil moisture levels supported pasture growth in May. Australian milk production for the 12 months to May was 5.6% lower compared to the previous comparable period.
New Zealand milk production was down 1.8% on a litres basis (down 0.4% on milk solids basis) in June compared to the same period the year prior. June production is typically very low and represents about 1% of the total season’s production. New Zealand milk production for the 12 months to June was 0.5% lower compared to the previous comparable period.
US milk production was flat in June compared to the same period the year prior. Increased production in the midwest region was offset by a decrease in the southwest, resulting in flat production year-on-year. Milk production for the 12 months to June increased 0.8% on the previous comparable period.
EU milk production increased 0.3% in April year‑on-year. The production increase was driven primarily by Germany, Netherlands and Poland, and partially offset by decreases in France and Italy. EU milk production for the 12 months to April was up 0.5% on the previous comparable period. Increases in Germany, the Netherlands, Poland and Belgium were partially offset by declines in France, Italy and Spain.