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Friday 03 December 2021

NZ meat outlook positive but agile leadership needed – Rabobank

22nd November 2021 By Staff Reporter | | @foodtickernz

The outlook for New Zealand sheep and beef meat remains strong but it is businesses with agile leadership that will best deal with disruption affecting food markets, according to Rabobank.

Sustainability-focused meat products will find a growing customer base, says Rabobank.

In the food and agribusiness banking specialist’s Global Animal Protein Outlook 2022 report released on Friday, Rabobank said that ongoing strong demand from China would underpin pricing for New Zealand meat, even as supply chain and cost challenges mount.

“We expect sheepmeat prices to stay above the five-year average in 2022, but they will likely ease from the highs recorded over recent months,” RaboResearch analyst Genevieve Steven said.

“Export demand from China and the US is expected to remain steady, but any potential easing of US consumer demand or increased shipping prices could see New Zealand export prices decline.”

High freight costs would likely continue to impact New Zealand exporters in 2022 and balancing these costs through the supply chain would be a key challenge.

“Ongoing lower supplies of Australian lean trimmings into the US are expected to be positive for New Zealand bull beef, however, strengthening of the NZD/USD could ease returns for New Zealand exporters,” Steven said.

“The potential easing of US consumer demand could also harm New Zealand export prices, but we do expect to see demand from China remain steady as New Zealand retains good access.”

Taking a global view, Rabobank said meat producers could face a leadership test in 2022 as the disruption affecting food markets continued.

However, progressive animal protein businesses would see the changes within the market as an opportunity for growth rather than solely as a risk.

“Rabobank sees agile business leadership as the most likely route to sustainable growth and is advising firms to embrace consumer preferences for sustainability and to be prepared for a surge in demand as economies continue to reopen and adjust following Covid-19-induced lockdowns,” according to global strategist for animal protein at Rabobank, Justin Sherrard.

On a consumer level, Rabobank expected demand for beef to remain solid, demand for salmon and shrimp to show ongoing strength, improving demand for poultry and strong sales of alternative proteins.

“Traditional meat producers won’t have time to lick their wounds after a challenging 2021,” Sherrard said.

“Those that show agility and resilience in embracing a rapidly evolving global market will be best placed to make the most of the opportunities for growth that will be presented to them.

“This won’t be easy. Shifting consumer tastes and channels, biosecurity issues and Covid-19 disruption are hurdles meat producers need to clear. But those that show the ability to do so will emerge as the real winners in 2022.”

Rabobank also expected the focus on sustainability to increase further in 2022, as food retailers and foodservice chains actively positioned on this theme with consumers and regulators.

“Opportunities will emerge for animal protein chains that require minimal incentives to transition to more sustainable production systems,” Sherrard said.

“Sustainability will also support ongoing investments in alternative protein and appeal to a growing customer base.

“In this dynamic market, the bank forecasts increased production and new product development in 2022.”



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