Meat & Livestock News

Rabobank Foresees Uplift in Dairy and Beef Markets, Sheepmeat to Follow

Black and white spotty cows on a farm stall


  • Rabobank predicts a positive shift in dairy and beef prices, with a delayed recovery for sheepmeat.
  • The forecast is influenced by global dairy supply constraints and robust demand in the United States for beef, amidst stable farm input costs.
  • Sheepmeat prices are expected to improve in the latter half of the year, despite the current slow demand and strong Australian supply.

In its latest Agribusiness Monthly report, Rabobank anticipates an upturn in dairy and beef prices for the upcoming year, though sheepmeat values are set to remain stagnant for a while longer. The bank highlights that, unusually, the cost of farm inputs hasn’t risen significantly this season, attributed to subdued demand from the northern hemisphere.

However, disruptions in the Red Sea could potentially escalate freight costs, affecting global markets.

Dairy prices are expected to climb as global supplies face challenges in gaining momentum, putting pressure on producers in the northern hemisphere.

Despite this, an increase in global supplies is forecasted towards year-end, driven by lower feed costs. New Zealand’s milk production has seen a slight decline, both in tonnage and milk solids, reflecting broader industry struggles.

Beef markets are showing promise, with current prices either meeting or surpassing the five-year average, buoyed by strong demand from the United States. New Zealand producers have enjoyed favourable conditions, reducing the need for early stock sales, though a dry autumn is on the horizon. Early processing figures indicate a decrease in both bull and cow slaughter rates.

Despite a 12% increase in beef export values to the US, exports to China have dipped by 19%, a trend Rabobank expects to persist through 2024 as Chinese demand wanes. The global beef production landscape sees Australia and Brazil increasing their output, which, coupled with reduced production in Europe and the US, could position New Zealand favourably in the market.

Sheepmeat prices, however, are predicted to remain unchanged in the short term, with potential signs of improvement later in the year. The market dynamics are influenced by strong Australian supply and sluggish Chinese demand. Australian lamb slaughter volumes have surged, contributing to elevated production levels, though a return to normalcy is anticipated in March.

The report also touches on the stable prices of phosphate in the early months of the year, with a global increase in DAP and nitrogen supplies expected to maintain price stability.

Nonetheless, the Red Sea shipping disruptions pose a risk of increased insurance and shipping costs, potentially impacting fertiliser and energy prices, crucial exports from the region.

Rabobank’s analysis suggests a cautiously optimistic outlook for New Zealand’s agricultural sector, with dairy and beef set to lead the recovery. Sheepmeat producers may have to wait longer for a market rebound but can expect some relief with favourable summer conditions allowing for weight gain in lambs to offset lower prices per kilogram.