August 2025 Newsletter
NZ Faces $300M Hit as U.S. Tariffs Rise to 15%
The U.S. has raised tariffs on New Zealand beef and lamb exports from 10% to 15% effective August 7, 2025, placing Kiwi farmers at a disadvantage in one of their most valuable markets. Beef now faces an in-quota tariff of ~15.6% and lamb ~15.1%. Though New Zealand hasn’t filled its quota since 2015, the increase could cost exporters over $300 million annually if volumes hold.
Key competitors retain stronger access: Australia remains at 10% under its FTA, while Uruguay and Argentina also sit at 10%. Brazil is effectively shut out with tariffs above 76%, while Nicaragua faces 18%. This reshapes competitive positioning—Australia is better placed, while New Zealand risks trade diversion.
Despite setbacks, U.S. beef herds are at historic lows and domestic demand is robust, creating opportunities for buyers seeking reliable supply. Beef + Lamb NZ and government officials are lobbying Washington for fairer access.
Source: Beef + Lamb New Zealand l August 5
NZ Beef Herds Rebuild as Sheep Numbers Tighten
Beef + Lamb New Zealand’s 2025 Stock Number Survey shows beef cattle numbers rose 4.4% while sheep numbers fell just 1%, signaling modest recovery after years of sharper declines.
Strong prices are boosting farmer confidence, with rebuilding seen in drought-affected regions.
However, challenges remain: breeding ewes fell 1.9%, forecasting a lamb crop down 0.6% (≈120,000 fewer head), compounding last year’s 1.5 million drop. Tight lamb supply will persist, with afforestation driving long-term stock losses—2.6 million units lost since 2017. Rising beef herds, driven by consistently strong prices, underline an ongoing shift from sheep to cattle production.
Source: Beef + Lamb New Zealand l August 15
Food Safety Watch: NZ Outbreaks Tighten Supply Vigilance
New Zealand has reported multiple foodborne illness outbreaks in recent months, raising safety vigilance across the supply chain. June saw 32 cases of gastroenteritis linked to Clostridium perfringens at a food business and a Vibrio outbreak traced to raw mussels, prompting officials to urge thorough cooking of shellfish.
May recorded a surge in Shiga toxin-producing E. coli (110 cases, up from 78 in 2024), including three HUS cases. April outbreaks included a school camp E. coli outbreak traced to cattle exposure. A new PHF Science study confirmed raw pork as a leading Yersinia source, reinforcing risk management priorities for importers and processors.
Source: Food Safety News l August 22
Grainfed Beef Supply Expands as Feedlot Utilization Reaches 93%
Australia’s feedlot sector is operating at record pace, with capacity reaching 1.7 million head, 93% utilization, and a record quarterly turnoff of 894,000 head. Grainfed exports surged 25% year-on-year and quarter-on-quarter, totaling 113,000 tonnes across 51 countries— the broadest market mix since 2017. China led with 35% of shipments, followed by Japan at 26%. Queensland and NSW drove growth, setting state records in capacity and utilization.
Stable grain prices (~A$350/tonne Darling Downs wheat) kept margins positive, supporting long-fed Wagyu programs and cattle finishing during dry conditions. Feeder cattle demand remains firm, with prices rising despite reduced yardings. Over the past five years, feedlot capacity is up 23%, cattle on feed 38%, and grainfed exports 42%, highlighting structural expansion.
For buyers, this means consistent availability of premium grainfed beef, though competition for feeder cattle will keep input costs elevated. Expect strong Australian supply to underpin procurement strategies into 2026.
Source: Meat & Livestock Australia l August 28
Mexico, Australia Step In as U.S. Buyers Pivot from Brazil
The U.S.’s new 50% tariff on Brazilian beef is set to reshape global trade flows. Analysts expect more U.S. imports from Mexico and Australia, while Brazil diverts volumes to China, Mexico, and potentially Japan. In August, Mexico overtook the U.S. as Brazil’s second-largest buyer, with re-export scenarios under discussion.
Despite the tariffs, Brazil is still on track for a 7.5% export increase in 2025 (3.08 million MT), up 13% year-to-date. Tight global supplies and historically low U.S. cattle herds will amplify competition, giving buyers reason to closely track trade diversions, sourcing shifts, and potential price volatility.
Source: Reuters l August 28
USMCA Trade Wins: Over 85% of U.S.–Canada Trade Now Tariff-Free
Canada will remove retaliatory tariffs on most U.S. goods effective September 1, 2025, matching exemptions under the USMCA trade pact. This move restores tariff-free access on over 85% of bilateral trade. However, duties on U.S. autos, steel, and aluminum remain, as
Canada retains targeted leverage in those sectors.
Prime Minister Mark Carney framed the action as a strategic de-escalation following discussions with U.S. leadership. Economists see this rollback as a way to ease trade tensions and potentially ease inflation pressures. It also positions Canada as maintaining a highly favourable trade relationship with the U.S. moving into the upcoming USMCA review.
Source: FoodMarket l August 22
Tariffs Drive Shippers to Consolidate Loads, Build Inventory
Freight data from SC Codeworks reveals how shippers adapted to tariff-driven volatility in early 2025. Importers shifted toward fewer, fuller loads, with March shipments up 32% YoY despite a 20% drop in order count, signaling aggressive consolidation to offset rising costs. Inventory strategies also changed: on-hand inventory rose 4%, while monthly order volatility spiked nearly 64% YoY.
This shift reflects responsive, ad-hoc planning replacing traditional seasonal cycles. For 3PLs, advanced warehouse management systems (WMS) became critical to maintaining efficiency, enabling real-time tracking and integration with ERP systems—helping supply chains navigate tariffs with resilience and data-driven agility.
Source: FoodMarket l August 20
Private Label Sales Surge Toward $285B in 2025
Private label sales continue to surge, with 2024 record sales of $271B projected to climb to $277–285B in 2025, according to PLMA president Peggy Davies. Growth reflects not just value but also rising consumer trust— 84% see store brands as equal or better quality. Retailers like Target, Aldi, and Costco are aggressively promoting their own brands, often using influencers and premium placement.
Innovation is strong, from Kroger’s dill pickle twists to CVS’s flavored almonds, with trends favoring nutrition, wellness, multicultural flavors, and protein-based beverages. Manufacturers remain challenged by volatile tariffs but are adapting through reformulation, transparency, and cleaner labeling.
Source: Supermarket Perimeter l August 15
Chicken Chains Lead Growth as Foodservice Navigates Headwinds
The U.S. foodservice sector faced its toughest start since 2021, with transactions down 7% in Q1 2025 as inflation, tariffs, and weak consumer sentiment squeezed operators. Rising labor (+35% since pandemic) and food costs (+37%) pressured margins, forcing chains to compete on value and convenience.
Limited-time promotions and chicken-based menu innovation helped offset traffic declines, with chicken chain sales up 9% in 2024. Operators are also investing in AI and robotics for efficiency, while partnerships with protein suppliers are evolving into strategic alliances. Off-premise dining continues to grow, now 30% of full-service traffic and 83% of limited-service.
Source: Food Business News l August 25
McLane Secures Five National Chains, Expands to 4,200+ Restaurants
McLane Company, one of the largest U.S. food distributors, has added five major chains—Carl’s Jr., Panera Bread, Steak ’n Shake, Subway, and Wendy’s—to its restaurant portfolio. The expansion covers 4,200+ locations across 33 states, supported by 15 distribution centers and one of the nation’s largest private fleets.
McLane’s strength lies in cold chain integrity, multi-temperature logistics, and scalable distribution models, enabling consistent product quality and support for limited-time offers. This move underscores consolidation trends in U.S. food distribution, where operators are seeking reliable, nationwide partners to drive efficiency, maintain food safety, and streamline supply across diverse markets.
Source: FoodMarket l August 22
