ANZCO Foods Market Update - September 2025

A better than forecast month for lamb numbers coming through our Canterbury and Rangitīkei sites has kept sales steady across our key premium markets – the UK, Europe, North America, and Japan. With only three weeks of reporting left in the livestock year, national numbers are still sitting more than one million lambs behind this time last year. This tightening of supply across New Zealand has supported the high revenues over recent months and explains why we’ve been paying such high prices for your livestock. Looking ahead, processors like us will be hoping for stronger numbers for the upcoming 2025/26 season, despite recent history suggesting otherwise.

In the UK and Europe, buyers have returned from their summer break, giving us a clearer read on the market. The demand for lamb is mixed with chilled lamb demand subdued as buyers remain cautious about the higher prices we are expecting. Conversely, inquiries for frozen lamb have been relatively strong, as UK and EU importers look to build stocks ahead of the Northern Hemisphere winter.

Our joint venture partner, The Lamb Company, continues to do a great job for us in the US and Canada. Despite the additional costs related to the 15% tariff on New Zealand lamb, they have been able to pass much of that on to their end users and continue to see solid demand for most of their products. There is growing concern around US domestic industry lobbying for a safeguard investigation on the impact of imported lamb from both New Zealand and Australia on the domestic industry. This is an unwanted distraction at a time when we are already dealing with a fair amount of volatility in the US trade policy space, and one that the industry and government are watching closely.

Our chilled lamb sales into Japan have been doing well as our team continues to work closely with retail partners. The foodservice sector continues to struggle, which has had an impact on some of our frozen lines, but as Japan heads back into cooler weather we are hopeful that we'll see an increase in consumption.

In China, lamb sales have held steady as importers prepare for the peak demand of Chinese New Year in early 2026. The next few weeks will provide a clear sense of the market’s strength and how confident customers are heading into that major holiday season.

On beef, from a supply perspective the New Zealand industry also continues to fall behind last season, with particular concern around prime steer numbers that are closer to 10% down year-on-year for the season. That is limiting the opportunity we have to maximise the value from the global beef market, which continues to perform strongly.

Last month I noted that by now it would be good to have certainly over the US position on tariffs, particularly when it comes to the additional 50% slapped on Brazil for dubious political reasons. Unfortunately, it seems that we will remain in a period of flux for some time yet, with the recent ruling by the federal appeals court that the Administration has acted outside of its authority. Tariffs remain in place while the Administration prepares to take their case to the Supreme Court for a final ruling. It's anyone's guess as to how that plays out, but the sooner we can get that decision the better, regardless of whether it falls in our favour or not.

Despite this political volatility and some signs of weakness in the underlying structure of the US economy, the US beef market continues to rise on the back of very tight domestic supply. Due to the prohibitive tariffs currently in place, the absence of Brazil is helping keep interest high for the limited amount of beef that we have available at the current time. 2026 certainly looks like it will be a positive year in terms of demand for our beef in this important market, and reports that Australian production could be down as much as 10-15% next year only adds fuel to the fire.

Elsewhere, beef markets remain relatively strong as customers fight to secure product against the pricing we are getting out of North America, with our premium beef sales into the likes of Europe and the UK performing well. China remains behind the game in terms of value, which is limiting our sales there, and Brazil has been diverting product back into China at a rapid rate, which will only serve to depress prices further for the foreseeable future. The relationship between China and Brazil will be one to watch over the coming months. It is clear that their political and economic ties are strengthening, with Chinese investment in Brazil doubling over the past 12 months. There is mutual interest on both sides to maintain a healthy working relationship, and food plays a major part in this story moving forward.

Otherwise, it’s full steam ahead as spring arrives in New Zealand and we work to get our plants running at full capacity as quickly as possible. As always, your ongoing ued support in this regard, as always, is much appreciated.