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Brief Bites, 24th April

Alliance Farmer Shareholder News

 

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In this edition:

  • Processing update 
  • Global supply chain disruption continuing
  • Venison in China
  • Supporting the next generation of chefs
  • Know Your Co-operative applications close tomorrow
  • Global market update
 

 

Processing update

 

 

 

Our post-Easter production is focused on frozen key account programmes. Processing capacity is recovering across our plant network as people return to work after isolating or staying at home to look after family members due to COVID-19. However, there remains unavoidable processing delays as we work through the back-log of livestock, particularly for cattle.

We have as much capacity as we can turned on to process farmers’ livestock and we are running overtime wherever possible. We are also moving livestock across our network to process your animals as quickly as we can. We appreciate your support and patience during this challenging time.

 

 

 

Global supply chain disruption continuing

 

 

 

The global supply chain disruption remains a key challenge:

  • On the west coast of North America, there is a waiting time of more than 28 days at Long Beach port. Oakland port is now also difficult
  • Rotterdam in the Netherlands is substantially impacted by the Ukraine war, as sanctioned cargo previously bound for Russia and shipping to Ukraine has been diverted to Rotterdam and we are seeing flow-on impacts to other ports
  • In China, Omicron has impacted Dalian, Shanghai and Yingkou. Tianjin is becoming increasingly problematic.

As a result, vessel schedule reliability has been affected, there are wider transit delays and port and landside productivity challenges. We can expect this to continue with product ‘rolling’ from one vessel to another vessel, affecting the supply of our products to customers.

These issues have also resulted in the removal of a considerable volume of reefers and dry containers from the global supply chain.

This is important as we need to carefully balance livestock flow and processing volumes with our ability to ship products to our global markets and customers.

 

 

 

Venison in China

 

 

 

We are making pleasing progress with retail sales of our venison in China, alongside our partner Grand Farm.

Venison rolls and brisket cubes were added to the Grand Farm range on jd.com, China’s second largest e-commerce retailer at the end of December in a programme supported by Deer Industry New Zealand’s Market Innovation Fund.

The meat roll is a familiar format for Chinese consumers and used in traditional hot pot cuisine, where the rolls are dipped in boiling stock with other ingredients. It uses venison extracted from the flaps and brisket that is compacted and then sliced very thinly to a one-millimetre thickness. Seasonings are added during the processing for added flavour.

Another two packs, venison leg meat, which can be sliced and diced at home by the consumer, and leg cubes, were introduced to the range in the last month.

All four products are now available in two independent retailers’ stores in five cities – Harbin in Heilongjiang Province, Dalian in Liaoning Province, Nanning City in Guangxi Province, Luzhou in Sichuan and Sanya in Hainan.

We are also working with the Grand Farm team to identify new products that will resonate with Chinese consumers.

 

 

 

Supporting the next generation of chefs

 

 

 

Alliance is proud to be supporting the Pure South Famous Young Chefs Degustation lunch in Invercargill this weekend. Top chefs from across the country will be working with 30 students from Southland Boys High School and Southern Institute of Technology at the event, which aims to inspire and encourage young chefs from the region. The chefs will share their knowledge with 30 trainees and guide them to prepare the lunch for 120 guests. Southland has a shortage of chefs and the event is being organised by the local economic development agency Great South, Savour the South and the Southland branch of Hospitality New Zealand.

 

 

 

Know Your Co-operative

 

Applications for our third ‘Know Your Co-operative’ seminar have been extended and now close tomorrow (April 25).
 
The seminar in Christchurch on 24-26 May 2022 will give 12 shareholders the opportunity to gain a more in-depth understanding of Alliance Group and will appeal to those shareholders that may be looking to contribute to Alliance as a director in the future.
 
Alliance will cover the costs of the seminar including meals and accommodation. Successful applicants will fund their own travel.
 
Applicants must be shareholders either directly or by way of a beneficial interest in a shareholding entity and be platinum or gold suppliers. If more applications are received than we have places available, the Board’s People Committee will decide the successful applicants.
 
The application form can be found here.
 
If you have any questions, please email: communications@alliance.co.nz

 

 

 

Update from our global markets

 

 

Lamb

It is not yet clear if inflation driven by higher energy and food costs will be absorbed by markets or a price ceiling is being met. There is some pressure on pricing as in some cases markets trade down to lower value proteins. In the EU and UK, market inventory remains low with demand steady but the general rise in costs is affecting consumer demand. The North American market is firm in retail and food service, however inflation is also affecting consumption. In China, demand is firm. COVID-19 issues in Shanghai, port congestion and the city lockdown are reducing consumption. The market in the Middle East is firm with product required to cover post Ramadan and beyond.

 

 

Mutton

Key volume markets such as Asia, North America and the UK remain steady with diversified spread of commodity and further processed cuts.

 

 

Venison 

Frozen negotiations to all key European customers have concluded with attention now focused on chilled negotiations for the 2022 Game Season. Early indications suggest that both price and demand will improve on levels achieved in 2021. The global supply chain issues may impact the timely delivery of product to our markets. Diversified sales of volume products to support our retail programmes in China and North America are continuing.

 

 

Beef

The disruption to  supply chains in China and lockdowns have impacted  beef sales. Some beef has been diverted from Shanghai where possible to Tianjin/Xiamen across a range of shipping lines/vessels. Whilst uncertainty remains around supply, demand is good and this has enabled us to have a full order book for China across beef cuts, beef offal and grinding meat including May production.

The US market continues to talk down the value of imported grinding beef. Volumes shipped from New Zealand to the US remain light. Asian markets are offering better value across lean and higher fat content trims. Demand in Japan has spiked with strong sales across higher fat content trims. US processors are currently preferring domestic beef as local processing volumes remain high. Brazil has now filled the 2022 quota for grinding meat with further sales incurring extra duty. NZ and Australia both have a lot of room left on their US quotas. The long term outlook is for pricing to remain strong and demand firm.

 

 

Co-products/Specialty Ingredients & Materials

Meeting the strong demand from markets remains the challenge due to the supply chain bottlenecks, especially in China. NZ’s Trade Weighted Index continues to be strong, meaning traded commodities such as tallow and meal are holding the strong pricing of recent months achieved through our auction process.

 

 

 

 


Warm Regards


David Surveyor – Chief Executive

 

 

 

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