Beef prices climb as supply contracts in key markets
With production volumes contracting in most major beef-producing regions, global cattle prices have continued to rise across recent months.
Many very large food companies, particularly in the US, are struggling to adjust to the changing tastes of consumers, says Nick Fereday, RaboResearch senior analyst consumer foods.
“There’s been a huge turnover of chief executives; a very dangerous job to be in right now is to run a big food company in the US. You are likely to be scalped, to have Wall St coming after you for not delivering in the quarter,” he told the Rabobank Farm2Fork conference in Sydney last month.
He cited Kraft Heinz as a case and gave some examples of that company’s latest ‘new’ products, which showed “little innovation and were not meeting consumer changes”.
Fereday says it is not just Kraft Heinz; large food companies spend very little on social research -- just 1%.
“They are much more interested in spending money on persuading you to buy their product than come up with innovative product and talk to the consumer.”
He says large companies that have succeeded for a long time, e.g. Kraft with brands 100 years old and Heinz now celebrating 150 years, have survived by being able to adapt to trends.
“Increasingly in the last five-six years they have become very ‘unstuck’ from what’s going on. That has left an opportunity for small companies who see opportunities and move,” Fereday said.
“The larger companies are struggling with a mind-set where they have been making, for instance, cornflakes forever so the solution is more cornflakes or better cornflakes and they can’t think beyond that and come unstuck.
“This is afflicting more the American companies than the European companies who have caught up and are beginning to change.”
According to ASB, Fonterra's plan to sell it's Anchor and Mainlands brands could inject $4.5 billion in additional spending into the economy.
New Zealand’s trade with the European Union has jumped $2 billion since a free trade deal entered into force in May last year.
The climate of uncertainty and market fragmentation that currently characterises the global economy suggests that many of the European agricultural machinery manufacturers will be looking for new markets.
Dignitaries from all walks of life – the governor general, politicians past and present, Maoridom- including the Maori Queen, church leaders, the primary sector and family and friends packed Our Lady of Kapiti’s Catholic church in Paraparaumu on Thursday October 23 to pay tribute to former prime Minister, Jim Bolger who died last week.
Agriculture and Forestry Minister, Todd McClay is encouraging farmers, growers, and foresters not to take unnecessary risks, asking that they heed weather warnings today.
With nearly two million underutilised dairy calves born annually and the beef price outlook strong, New Zealand’s opportunity to build a scalable dairy-beef system is now.

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