Prime Cut: New meat export season ahoy

We’re quickly heading towards the 1 October start of New Zealand’s 2016-2017 new meat export season. Despite the rapidly changing world scene for those exports, the nearly $8 billion red meat industry seems to be in good spirits. 

Red meat sector personnel, government officials, politicians and diplomats gathering at the Meat Industry Association (MIA)’s annual cocktail party in Wellington on Tuesday heard Minister for Primary Industries Hon Nathan Guy say he thought the red meat sector is in “pretty good heart”.

“In the last 12 months you’ve grown by about NZ$1 billion of export returns on the back of what’s happened with beef prices, which is fantastic,” he said, acknowledging there are still a few issues in terms of lifting up the sheepmeat returns, especially for lamb which has ongoing uncertainties with exchange rates and uncertainties in Europe.

However, Brazil gaining more access to the US and China for its beef exports “will be one to watch,” he said.

Metamorphosis from ugly broke duckling

The industry’s metamorphosis from ugly broke ducking continues. News yesterday of final ministerial approval of the Overseas Investment Office process for a 50/50 venture between New Zealand’s largest meat processor Silver Fern Farms and Chinese meat processor Shanghai Maling Aquarius was welcomed by Guy.

“That’s going to mean a major capital injection into the industry. Ultimately, I think it will drive up returns back to the farm-gate,” he said to the audience, which included NZ First’s Hon Winston Peters.

The Chinese market has become one of New Zealand meat’s biggest customers, of course, and industry continues to maintain and build personal relationships with personnel there. News now is that the Ministry for Primary Industries (MPI) is making good progress towards a chilled meat protocol with China. Chilled has a “fantastic premium story”, the Minister said.

However, sorting out the cold chain between New Zealand and customers in the market to allow the high value chilled meat to be delivered will remain a priority for industry.

Indonesia beef access close to being sorted

In addition, Ministry for Foreign Affairs and Trade (MFAT)’s efforts to resolve access issues for New Zealand beef into Indonesia through the World Trade Organisation (WTO) dispute panel are close to being sorted, reported Guy. “I think that market for you, as it once was, is going to be an important and growing  market, particularly for products like offals.”

The issue will be discussed this week when Minister for Trade Todd McClay is heading to Indonesia this week to meet with new Trade Minister Enggartiasto Lukita and deliver a keynote speech at the World Renewable Energy Congress.

Lamb focus on UK and Europe

Industry focus is now firmly, though, on the UK and the European Union, post-Brexit – both of which are “really important markets for New Zealand”, especially for lamb, said new MIA chairman John Loughlin.

Guy spoke of four Rs: reassurance “nothing is going to happen overnight”; rights will be protected through the World Trade Organisation as the referee; the roadmap is being worked on with industry, “We collectively need to keep shoulder to shoulder, hand to hand on this one,” he said; and resources. All of the laws have come out of Brussels and the UK needs to come up to speed. “We need to be closely connected,” he said.

Officials are working hard on the NZ-EU free trade agreement and the Minister hopes there will be more news on that next year.

MIA’s role to create an efficient, effective playing field

In his welcome, Loughlin also made reference to the need to play as a team this meat export season.

The nearly $8 billion highly regulated red meat industry is the second largest primary production sector, after dairy, and is New Zealand’s second largest manufacturing sector by employment with around 25,000 working in it, he pointed out. Although personally not a fan of regulation, he recognises its importance for this industry for biosecurity, to protect the industry’s reputation as a producer of safe food and for purposes of integrity.

The MIA’s role is to create an efficient, effective playing field for the people of the New Zealand meat industry to be part of world class supply chains deriving value from the marketplace, he said.

“As we look forward, there’s a big game to play for New Zealand and a lot of teamwork is required in those key areas of market access and the regulatory environment,” he said, adding that the MIA is also involved in many other little things that are really important for industry. These include, amongst other things, work towards the Government Industry Agreement on biosecurity, input on new regulations for bobby calves and an update of the industry’s health and safety guidelines.

New farm assurance scheme on the way

Primary Growth Partnership programmes, with various industry players and the Ministry of Primary Industries (MPI) are targeting niches and realigning supply chains. According to the Minister these are “really starting to see value inside the farm-gate and/or for processors as well.”

In addition, meat industry innovation programmes and projects are also producing results.

Other new things to watch for next season include the launch of the Red Meat Profit Partnership’s new farm assurance scheme, which seems already to have wider support from processors outside the six within the partnership, and its preparation of the red meat sector’s story.  Plus any progress towards full ratification of the Trans-Pacific Partnership (TPP) will be vitally important for New Zealand.

Speaking in New York on Tuesday, Prime Minister John Key reinforced the benefits of TPP to the Council of Foreign Relations, pointing out that the Pacific Region will not wait for US ratification, which is being prioritised through US Congress this year.

“Asian countries are determined to grow and they realise to grow they need to remove trade barriers. This will happen with or without the US,” he said.

Exporters in the New Zealand meat industry boat will be working with traditional and emerging markets in the 2016-2017 meat export season to ensure that high quality, value-added New Zealand meat products are sent around the world. They will be also be getting to know more new customers in emerging markets.

And, good luck to all of us who sail in her. Bon voyage!

 

 

 

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