It’s been a good year for red meat sector business, an audience of over 240 heard from Meat Industry Association (MIA) chairman John Loughlin earlier this week. But, the coming meat export season will be tempered by uncertainty, both in global markets and also here at home.
Every year, the Meat Industry Association (MIA) throws a cocktail party in Wellington. It is always well attended by decision-makers – including those from the processing industry, farming leaders, politicians, government and primary sector partners – who see it as good opportunity to catch up with colleagues on red meat sector business issues.
Loughlin pointed to total exports growing by eight percent, or $675 million, to $8.75 billion in 2018/2019, with the largest growth in China. Exports to that market grew by 49 percent to $3 billion, partly due to the impact of the African Swine Fever outbreak and on-going strong demand for protein, he said, adding the sector is still working on relationship building and pressing for the listing of processing plants for chilled meat for the market, amongst other issues.
Meanwhile, uncertainty around Brexit has caused exports to the sector’s third largest market, the UK, drop by 11 percent to $466 million. Both the UK and EU are very important markets for New Zealand, especially for high-value chilled sheepmeat, and the sector remains “deeply concerned” with the split World Trade Organisation tariff-rate-quotas.
“A very positive development,” Loughlin said, has been the opening up of markets now the Comprehensive and Progressive Trans-Pacific Partnership has come into force. This has evened the playing field with Australia in Japan and the sector is already seeing a re-balancing of the market share there with 2018-2019 beef exports increasing by 38 percent in volume to 19,583 tonnes and 34 percent in value to $183 million compared to the previous year.
Meat companies collaborating together and with Beef + Lamb NZ Ltd in the sector’s Taste Pure Nature marketing initiative, which has been piloted in the US this year and has plans for launch in China, has been a positive move too, he thought.
“Our industry has a great story to tell, producing natural grass-fed food, he said, adding n the medium-term, the MIA sees Taste Pure Nature “as a way to capitalise on the sensible, balanced, environmental progress that we are committed to making.”
However, meat companies continue to be concerned about the shortage of around 2,000 skilled workers, frustrated at “the very bureaucratic and unresponsive immigration system”, about potential changes for the sector’s “very successful” training programmes, and evolving government policy around the environment, climate change and now freshwater, with the launch of a six-week consultation period for the National Policy Statement by Minister of Environment David Parker with the Minister of Agriculture and Rural Communities Damien O’Connor.
“We share the Government’s ambition for swimmable rivers and recognise the need to act sensibly,” commented Louglin. “Our initial basic concern is that the Government is taking a very blunt instrument to what is a lot of very complex local problems. As with climate change policy, it’s not clear the Government has thought through all the unintended consequences of its policy.”
Animated conversations around the room later showed others agreed 2019-2020 will be a bit Jekyll and Hyde. Despite all of the opportunities that – with a fair wind behind it – the sector might be able to take in the globally uncertain world, it was apparent business confidence, especially that of the farmer suppliers, is waning.
The rural sector is facing a whirlwind revolution in on-farm technology, massive and unreasonable pressure from environmental and water demands and (while you’re at it) for it all to happen next week, regardless of biological systems. The Minister says he is proud of our farmers and their ability to adapt. But, it’s all too much and too soon. And, for some, it seems almost impossible.
In an excellent open letter yesterday to ministers and the PM, respected agribusiness consultant Chris Garland wrote: “Farmers are not environmental vandals. They are a business sector that has found itself at the centre of a maelstrom of environmental concern.”
As Loughlin noted in his closing comments in Wellington: “These are times of challenge for the primary sector. But challenge brings opportunity. We are committed to finding a sensible, responsible and practical way through the future and to capitalise on the opportunities that are created,” he said.
To help the red meat sector realise those valuable opportunities, Government ministers need to work much more closely with it to better understand its needs and difficulties and to move forward positively into the future together.