Momentum building in sustainable beef

Blake Holgate, Rabobank
Blake Holgate, Rabobank

Momentum has been building in sustainable beef over the past 12 months, with this area of the market forecast to develop even further in the year ahead, according to Rabobank’s latest global Beef Quarterly report.

The just-released report says while the concept of sustainable beef production is not new, the past 12 months have seen a noticeable step up in the number and variety of initiatives related to sustainable beef across the globe, as beef production comes under increasing scrutiny over its impact on animals and the environment.

The report says the majority of these initiatives have been market-driven, either led by food retailers and food service companies or developed by beef processors and producers in response to these changing market dynamics. Examples cited in the report include:

  • McDonald’s commitment to purchasing sustainable beef based on the principles and criteria established by the Global Roundtable for Sustainable Beef (GRSB).
  • The creation of the Brazilian Association of Carbon-Neutral Meat Producers in February 2019 to develop both supply of, and demand for, carbon-neutral beef. Brazilian processor, Marfrig, has already offered to deliver the first carbon-neutral beef products in 2019.
  • Cargill’s announcement in July 2019 that it would reduce greenhouse gas emissions from its beef production chain in North America by 30 per cent by 2030.

Rabobank sustainability and animal proteins analyst Blake Holgate said an increased focus on sustainable beef would create opportunities for New Zealand beef suppliers who are able to meet required standards, while suppliers who are not are likely to find it increasingly difficult to access these markets.

“New Zealand is in a strong position to capitalise on these opportunities, with many aspects of New Zealand’s extensive, pasture-based beef production systems already aligning closely to what the market is asking for. However, New Zealand producers will be increasingly required to demonstrate through verifiable evidence exactly how they are meeting these standards,” he said.

The Rabobank reports says the pace of change around sustainability in beef supply chains is set to increase further.  “The market will continue to be the main driver of changes in most parts of the world, supported by the actions of governments, NGOs and pressure groups, as well as investors and the rise of alternative proteins,” it says.

Dominant global themes

In the global beef market generally, the Beef Quarterly report says, the current dominant themes are strong beef demand in China (with imports in the first half of 2019 up by more than 50 percent year on year) and trade uncertainty – including the US-China trade war, Brexit, and new Mercosur access to the EU.

New Zealand

For New Zealand, the report says farm-gate prices are expected to remain firm over the next quarter, with some potential for upward pressure on prices due to favourable export market conditions and tight domestic supplies.

Holgate says the demand outlook from China remains positive, while US-imported beef prices continue to sit well above last year’s levels.

“New Zealand beef exports to China from May-July were up 105 percent year-on-year (YOY) by value and 91 percent YOY by volume. Conversely, exports to the US were down 42 percent YOY by value and 34 percent by volume as US importers struggle to compete with prices currently being paid by the Chinese market,” he said.

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