ANZCO Foods Market Update - July 2026

Since my last market update in June there have been a few developments, none of which can be described as positive when it comes to the outlook across global beef and lamb markets.

At the time of writing last month’s report, the MoU between Iran and the US had just been signed, which I hoped was a positive development that would provide a welcome boost to the global economy and consumer confidence. As we all know, as of this week that agreement has failed to deliver and the US appears to be back at square one, returning to its strategy of bombing Iran and, as a result, facing counterattacks across the region. None of this is going to do us any favours when it comes to rebuilding confidence within our global customer base.

I also noted in last month's report around the continued lack of updates out of the US Administration related to its Plan B for tariffs, with my position being that ‘no news is good news’. Unfortunately, this week there has been some news, with it now appearing that the Administration will pursue an investigation into the US lamb market, assessing the adverse impact imports from New Zealand and Australia have had on the domestic industry and providing a vehicle for potential tariff hikes. This will obviously be vigorously defended by the New Zealand industry and Government, but it is an unwelcome development that simply adds to the uncertainty within our business and our US customer base as we look ahead to 2027.

Perhaps the most important development over the past four weeks, however, has been a change in market sentiment in the US that is impacting our beef business. Over recent months I've been reasonably consistent in signalling that we have been operating in a two-speed market globally, with the US continuing to perform extremely strongly while the rest of the world begrudgingly followed along. That has changed over recent weeks. Beef prices for our product have softened materially and customers have become increasingly reluctant to commit.

Mel Croad posted a solid overview on the Farmers Weekly website this week of the factors contributing to this change in market sentiment, which you may have read. In short, we are seeing increasing volumes of Argentinian, Brazilian, and Australian beef in the market, with the Brazilian product in particular having a significant impact given the price discount offered. This has seen more of our traditional customer base reconsider its historic position around Brazilian beef, opening up supply chains to take advantage of more competitive offerings and offset the very high beef prices they have been forced to pay in recent times, not just for our own product, but also for domestic supply.

I am of the view that nothing has changed fundamentally in the US market. Domestic cattle numbers continue to decline and domestic beef prices continue to rise, and that continues to present significant opportunity for New Zealand exporters for an extended period. It is widely expected that Australian beef supply will start to tighten up as the remainder of the year unfolds, which will put us in a stronger position. Likewise, I would expect to see Brazilian offers dry up as we head into the last quarter of the year, with their focus shifting back to preparing their supply chains to take advantage of the quota access available again from January 2027. In my mind, we are talking about a three-month window of more challenging market conditions, which ultimately fits reasonably well with our seasonal decline in volumes. It will therefore be a matter of persevering and ensuring we are in the strongest position to take advantage of a recovery in prices when – not if – that starts to occur.

As referenced in previous reports and above, the rest of our markets continue to be a struggle. Having said that, we also continue to achieve strong prices for our product, signalling that we may well be in the midst of a systemic change in market conditions where the value of our beef and lamb is going to remain consistently higher. That doesn't mean we won't see prices come under pressure from time to time, or go through the normal cycles of peaks and troughs, but if that pricing band is now higher than what we have historically been used to, then that presents us with significant long-term opportunity. It also gives us the best chance of ensuring livestock prices operate in a band that is consistently above what we have historically considered to be normal here in New Zealand.

All the above suggests that the second half of 2026 will be an interesting period in global markets, and one that could set the tone for the next couple of years. Let's see where we are in a month’s time to determine whether the current course has been maintained, or whether something new has appeared on the horizon that blows my theories out of the water and forces us to change direction once again!