Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Demand drivers are changing in the global protein matrix

Raising the ‘steaks’ – demand drivers are changing in the global protein matrix

New York-based head of Rabobank’s Food and Agribusiness Research Bill Cordingley
is visiting New Zealand this week with the message that demand drivers are changing within the global protein matrix as developing markets’ needs surge ahead.

Graziers, processors and industry stakeholders from New Zealand will hear from Mr Cordingley this week, with presentations taking place in Auckland, Whangarei, Hawkes Bay, Christchurch and Dunedin.

Mr Cordingley says a shift is taking place on the global protein stage – with traditional, developed markets facing the challenge of stagnating or slow-growing economies, declining household real incomes, and stalling top-line volume growth.

“Adding to this, strong developing market demand for animal proteins has increased the cost and volatility of commodity inputs globally, making meat more expensive for western consumers,” Mr Cordingley says.

“Lifestyles are changing in the west: single-person households, double income households, a greater focus on obesity and general wellness, and an already incredibly high per capita meat consumption combine to make the meat industry in the west now driven by finding growth and value in a declining volume market.”

On the “other side of the fence”, Mr Cordingley says developing markets hold the future for protein consumption growth based on strongly-growing population and income growth, with a large cohort of consumers moving into the sweet spot for diet change.

“This change sees accelerated demand growth for animal protein in the diet, but cost and efficiency is key,” he says.

“This means the ‘first cab off the rank’ is usually seafood or poultry. We see enormous increases in poultry imports to Africa at present reflecting this demand drive. However, all developing markets do not develop the same way, based on population and income.”

Cultural drivers play a huge role, including how meat is traditionally produced and delivered, through wet markets or more modern retail, cooking preferences and indeed religious preferences, Mr Cordingley says.

“For this reason there is limited opportunity for pork in Indonesia and other Muslim countries whilst beef is not preferred in India,” he says.

“Poultry is the most efficient and low-cost animal protein alternative beside seafood and suffers fewer of the cultural challenges. We expect poultry to be the number one consumed meat in the world by 2020.

“While developing demand growth is driving volume growth for meat consumption, it’s also driving volatility in margins for producers and processors who are trying to tackle the new opportunity.”

Higher feed costs have caused significant challenges over the past decade. In addition, Mr Cordingley says weakening consumers in the west looking to trade down are also chasing cheaper protein alternatives and this is causing a convergence creating a strong drive to produce more efficient animal protein.

As a result, feed costs are pushing prices up for traditionally cheaper items like poultry, pork or ground beef as people want more of this than there is to go round.

Keen to capitalise on the emerging market demand growth opportunities are New

Zealand protein producers. The question is, how?

Mr Cordingley says a proactive export market development approach is essential.

“Persistent upgrading of the brand, demonstrating reliability in international markets, and excellent food safety are all key elements that will help New Zealand to leverage the opportunities in emerging protein market,” he says.

“A great example of these factors at work is New Zealand and its access to the Chinese beef market – years of forward planning, education and marketing towards Chinese officials, trade and consumers along with an excellent differentiated product built around a clean green natural image has resulted in New Zealand gaining access to the fastest growing beef import market in the world, as one of only three countries with such access along with Australia and Uruguay.

“This is a big deal when countries like US, Brazil, Argentina and even Canada either have no or limited direct access to this market. This will change but the head-start New Zealand has now is priceless.”

Mr Cordingley is part of Rabobank’s Food & Agribusiness Research and Advisory
division (FAR) where he is responsible for analysing the beef and protein sectors.

Comprised of a network of some 80 analysts spread across ever major production and consumption region of the world, FAR is a central component of Rabobank’s capacity for informed credit decision making, product development, advisory services and strategic client partnerships.

With a deep connection to the agricultural industry, Mr Cordingley was raised in south eastern Australia where his family operated a mixed cropping and livestock enterprise and a meat processing business. He previously held roles in consulting, as a commodities trader and as manager of the livestock export program with Meat and Livestock Australia. In 2005, Mr Cordingley joined Rabobank in Sydney as the senior analyst for animal proteins. He was promoted to head of FAR in Australia and New Zealand in June 2006 and in early 2009 transferred to the U.S. to take up his current position head of Food & Agribusiness Research and Advisory for Rabobank International in the Americas region.

Mr Cordingley graduated from the University of Sydney with a degree in Agricultural Economics and holds an Masters of Business Administration from Macquarie Graduate School of Management (MGSM) in Australia.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Speaking For The Bees: Greens Call For Neonicotinoid Pesticide Ban

The National Government should ban the use of controversial pesticides called neonicotinoids after evidence has revealed that even at low doses they cause harm to bee populations, the Green Party said today. More>>


Science Awards: NZAS Celebrate NZ Scientific Achievements

The Marsden Medal is awarded for a lifetime of outstanding service to the cause or profession of science, in recognition of service rendered to the cause or profession of science in the widest connotation of the phrase. This year’s medal is awarded to Dr Mike Andrews. More>>


Court Rules: Affco 'Unlawfully' Locked Out Meat Workers

The note says the full court found for the plaintiffs, "that is that the defendant locked out the second plaintiffs unlawfully and that it breached s 32 of the Act by acting otherwise than in good faith towards the plaintiffs while collective bargaining was still going on." More>>


New Bill Introduced: GST On Online Services

These measures are an important first step in the Government’s efforts to deal with increasing volumes of online services and other intangibles purchased from overseas suppliers that should, under New Zealand’s tax rules, be subject to GST. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news