Wednesday, 29 September 2021 15:25

Solid fundamentals and strong demand support positive outlook for 2021-22 season

Written by  Staff Reporters
Forecasts for global sheepmeat and beef demand look positive for the 2021-22 season. Forecasts for global sheepmeat and beef demand look positive for the 2021-22 season.

The forecast for global sheepmeat and beef demand is positive for the 2021-22 season supported by  solid market fundamentals, strong demand and tight supply, according to Beef + Lamb New Zealand’s (B+LNZ) New Season Outlook 2021-22.

“The outlook is positive. Fundamentals in key markets are solid, as strong demand and tight supply mean prices in export markets are forecast to lift for both sheepmeat and beef,” says B+LNZ’s chief economist Andrew Burtt.

The outlook also forecasts average farm profit before tax to lift 9% in 2021-22, reflecting a 4% lift in gross farm revenue and increasing sheep revenue, including a modest lift in wool prices.

“However, the forecast for a stronger New Zealand Dollar (NZD) will offset some of the buoyancy in New Zealand’s overseas markets and therefore limit increases in farm-gate prices,” Burtt explains.

China remains a critical driver of red meat export performance in 2021-22.

“Demand from China and the US underpinned solid export returns in the latter part of the 2020-21 season as the economic recovery in both countries has been rapid and fuelling consumer confidence.

“China’s demand for meat protein continues to be fuelled by pork shortages that have resulted in African Swine Fever (ASF) and also continues to be supported by growing consumer incomes and urbanisation,” says Burtt.

“Overall, the positive outlook is underpinned by the global economic and foodservice recovery and tightening global beef supply.”

The challenge in the new season remains the disruptions to supply chains and increased freight costs that are related to the global Covid-19 pandemic, the spread of the Delta variant and the impact on economic recovery.

B+LNZ forecasts New Zealand’s receipts from exporting red meat will be about $8 billion, slightly down on 2020-21. While lamb export receipts are forecast to increase by 2.2% on 2020-21, beef and veal export receipts are forecast to decline by 7%, driven by a decline in production and the adverse impact of the high NZD on export values.

“The red meat sector’s exports are critical to the New Zealand economy, and the COVID-19 uncertainty reinforces the need for stable and predictable domestic regulation to avoid putting pressure on the red meat sector.”

Farmer confidence is mixed. While on-farm profitability is positive, resilience is being tested by the volatility of adverse weather events and the extent of environmental regulation.

Farmers are expected to spend an average of $491,300 on goods and services for their farms, up 3 percent on 2020-21.

More like this

Industry reacts to UK FTA

Primary industries stakeholders  are welcoming the new Free Trade Agreement (FTA) with the United Kingdom announced today.

Stop carbon farming!

Beef+Lamb NZ says current Government policies will see too much carbon forestry planted and urgent change is needed.

More youth funded into sheep and beef careers

Beef + Lamb New Zealand (B+LNZ) have signed a funding agreement with the Growing Future Farmers (GFF) Essential Farm Skills Programme, helping attract and train more young people in the red meat sector.

Farmers flock to climate change workshop

Over the next two weeks, more than 1,500 farmers around New Zealand are getting to grips with why and how they should start responding to a changing climate, thanks to new workshops run by Beef + Lamb New Zealand (B+LNZ) and Silver Fern Farms (SFF).

National

Industry reacts to UK FTA

Primary industries stakeholders  are welcoming the new Free Trade Agreement (FTA) with the United Kingdom announced today.

Historic FTA deal struck

Comprehensive, inclusive and high quality and providing fantastic opportunities for our exporters.

Tatua smashes $10 barrier

Waikato milk processor Tatua says keeping products moving to overseas customers during the pandemic was one of the highlights of…

Machinery & Products

Robo planter on the way

German farm machinery manufacturer Horsch says it is at an advanced stage of developing its aptly named Robo autonomous planter.

Keeping everyone safe

As tractors get larger and front linkage kits become more common, many have started fitting underrun or collision protection systems.

» The RNG Weather Report

» Latest Print Issues Online

The Hound

Flag it!

OPINION: Agriculture and Trade Minister Damien O'Connor tried to keep his latest overseas jaunt secret squirrel.

Oh dear!

OPINION: This old mutt suggests that farmers' growing discontent with Beef+Lamb NZ's performance is going to reach fever peak after…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter