Tuesday, 26 January 2021 08:55

Covid minces meat prices

Written by  Sudesh Kissun
eef and lamb prices have been hit particularly hard by the pandemic given many cuts of meat – particularly for lamb – are consumed in restaurants. Photo credit: Kieren Scott - Minaret Station eef and lamb prices have been hit particularly hard by the pandemic given many cuts of meat – particularly for lamb – are consumed in restaurants. Photo credit: Kieren Scott - Minaret Station

Farmgate red meat prices are taking a hit as Covid continues to disrupt dining out businesses around the world.

Beef prices are down 16% on a year ago, lamb prices down around 18% in New Zealand dollar terms.

ASB economist Nat Keall says it’s a more muted start to the year for beef and lamb prices when compared to
dairy.

Keall notes that lamb prices in particular aren’t too far above the lows seen in the immediate post-pandemic churn.

By contrast, ASB’s dairy indices are only down about 8% in NZ dollar terms, a reflection of the 9% lift in the currency over the year. Forestry and fruit indices are actually running ahead of this time last year in NZ dollar terms and are up strongly in US dollar terms.

Keall says two downside factors in particular are weighing on the meat sector: the global pandemic and tentative signs the world is emerging from the global protein shortage of recent years.

“Beef and lamb prices have been hit particularly hard by the pandemic given many cuts of meat – particularly for lamb – are consumed in restaurants, hitting demand and limiting the mark-up sellers can charge,” he told Rural News.

“While the global vaccine rollout is tentatively underway, restrictions crimping the food service sector remain in place in
many parts of the world.”

And there is little light at the end of the tunnel as market and logistical risks remain in play.

ANZ agriculture economist Susan Kilsby expects farmgate prices for lamb and beef to soften further as we head into the peak processing months.

“Winter returns were lower than normal, but aligned with our previous expectations, as lockdowns limited demand for dining out opportunities,” Kilsby says.

 China remains a bright spot as its economy is recovering quicker than other parts of the world.

But Kilsby warns that further lockdowns remain the key risk.

 A lack of cool store capacity and disruption to shipping could cause processing delays later in the season.

Meat prices also look set to lose a key support too as the Chinese pig herd continues to rebuild after being thinned out by African Swine Fever (ASF).

ASB’s Nat Keall says the global protein shortage triggered by ASF has been a much-needed price support over recent years, partially offsetting the impact of Covid.

“At times, ASF has shrunk the Chinese pig herd by as much as 40%, forcing consumers to substitute pork for other types of meat. For now, prices remain historically high.

“However, the latest data shows China’s pig herd back at 90% of normal levels as of the end of November 2020, suggesting things could start to ease a little as time goes on.”

More like this

$9 milk price on the cards?

Growing global demand for dairy products and a flat milk supply could be setting the stage for a near-record farm gate milk price this season.

$8 final milk price likely

An $8/kgMS farm gate milk price is still on the cards with less than six weeks left to run this season.

Featured

NZ household food waste falls again

Kiwis are wasting less of their food than they were two years ago, and this has been enough to push New Zealand’s total household food waste bill lower, the 2025 Rabobank KiwiHarvest Food Waste survey has found.

Editorial: No joking matter

OPINION: Sir Lockwood Smith has clearly and succinctly defined what academic freedom is all about, the boundaries around it and the responsibility that goes with this privilege.

DairyNZ plantain trials cut nitrate leaching by 26%

DairyNZ says its plantain programme continues to deliver promising results, with new data confirming that modest levels of plantain in pastures reduce nitrogen leaching, offering farmers a practical, science-backed tool to meet environmental goals.

National

Machinery & Products

Tech might take time

Agritech Unleashed – a one-day event held recently at Mystery Creek, near Hamilton – focused on technology as an ‘enabler’…

John Deere acquires GUSS Automation

John Deere has announced the full acquisition of GUSS Automation, LLC, a globally recognised leader in supervised high-value crop autonomy,…

Fencing excellence celebrated

The Fencing Contractors Association of New Zealand (FCANZ) celebrated the best of the best at the 2025 Fencing Industry Awards,…

» Latest Print Issues Online

The Hound

A step too far

OPINION: For years, the ironically named Dr Mike Joy has used his position at Victoria University to wage an activist-style…

Save us from SAFE

OPINION: A mate of yours truly has had an absolute gutsful of the activist group SAFE.

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter