Opportunities are knocking for the New Zealand meat industry around the globe, not only in China, and Richard Brown of European meat research agency GIRA had an “optimistic agenda” of items for delegates at the recent Red Meat Sector conference.
He painted a picture of producer prices for both sheepmeat and beef going up around the globe. “These prices were unimaginable five years ago. It’s a hugely more positive environment than it was,” he said.
However, Brown noted that meat processors around the world are still facing significant issues. Europe’s largest processor Vion is in “deep trouble”, he noted and is in deep retreat from the UK, selling that business there in a ‘fire-sale.” He also pointed to the recent purchase of US processing giant Smithfield by Chinese meat processor Shanghui, and Marfrig selling its South American business last year to the biggest meat company in the world, the Brazilian-owned JBS.
The detailed slides he presented showed import growth in Asia and the Middle East and North Africa, and export growth from India – mainly cheaper-priced buffalo meat – primarily to the Middle East and North Africa.
China now dominates both world sheepmeat consumption and production, but Brown said that production is levelling off and that GIRA is sceptical of its ability to increase much further. India dominates beef production and exports, but again he questioned how long its growth can it continue.
“It all paints a picture of tight supply and producer caution,” he said, adding “It’s all a sea of opportunity.”
New Zealand exports of sheepmeat and beef trended upwards “extraordinarily” in the first quarter of this year, Brown noted. The good news is that “New Zealand is not overly dependent on one or two markets and is far more careful about not being threatening and not undermining other markets,” he said.
His presentation tallied with Andrew Burtt’s, which showed that to the year-end March 2013, the established British market is still the top earning market for New Zealand lamb ($504 million), “providing 20 cents out of every dollar New Zealand earns,” and reflecting the deep personal and commercial relationships that have been developed over many years.
“Exports to the UK are no longer heavily dominated by carcases – that was over 30 years ago. Now, there is a pretty even split between chilled and frozen lamb and it’s almost all lamb cuts. Carcases only make up a tiny proportion of exports,” Burtt said.
However, China is snapping at its heels and is a key market for both sheepmeat and beef exports from New Zealand as both his and Richard Brown’s presentations showed. That market has risen from the number 10 spot on the sheepmeat export table in 2005-2006, before the FTA was signed, to number two worth $343 million in the last 2012-2013 year. It has been taking lower value items like flaps, but it is now moving towards higher-valued cuts.
For beef, half of every dollar earned comes from the US, which takes about 200,000 tonnes last year and is the top earning market for New Zealand (just over $1 billion). China didn’t feature at all in 2054-2006, but has leapt up to number four on the table this season and was worth $121 million in the year-ending March 2013.