Prime Cut: Beef’s billion dollar quarter

With the US Independence Day just behind us, here’s a fun fact that slipped everybody by. In the first quarter of this year, New Zealand’s beef exports alone were worth NZ$1 billion, up 42 percent on the same period last year.

The Meat Industry Association (MIA)’s analysis of Statistics New Zealand figures for Q1 2015 (ending 31 March), show the value of New Zealand’s beef exports went up by 42 percent from $708 million in the first quarter of 2014 to $1 billion in the same period this year.

MIA policy analyst Matt Conway notes that volumes were up too, but not to the same extent, meaning New Zealand earned more for the trade. Overall, beef exports were up 11 percent in volume, compared to Q1 in 2014.

“In particular, there was a significant increase in beef exports to New Zealand’s largest beef export market, the US. They were up 26 percent by volume and 72 percent by value, largely driven by beef shortages there,” he explained.

He also noted that Australian beef exports to the US increased by 56 percent from from 67,209 tonnes in Q1 2014 to 105,140 tonnes in Q1 2015.

New Zealand’s beef exports to China were also up by 53 percent in Q1 2015, compared to the same period the previous year.

Beef exports to Indonesia remain a problem, for New Zealand, however. “These were significantly down in Q1 2015, compared to Q1 2014, reflecting the impact of regulations put in place by the Indonesian government at the beginning of 2015 restricting the types of cuts that can be imported into that market.”

MIA is keeping a watching brief on the situation as the joint US/New Zealand complaint to the World Trade Organisation about Indonesian trade restrictions makes its progress through the system.

For sheepmeat, it was a different matter, however. The stats show an eight percent decline in volume, compared with Q1 2014, but only a relatively small decrease in the value of exports.

The most significant decline was in export to China, says Conway. This was down around 24 percent by both volume and value compared to Q1 2014. “However, this was partly offset by an increase in the volume and value of exports to the UK.”

Sheepmeat volume to the UK rose by 9.4 percent and value by 11 percent in Q1 2015, compared with the previous year. Shipments of New Zealand sheepmeat worth $239 million were shipped to the number one market, China, and over $236 million to the UK, New Zealand’s second largest market.

Q2 statistics are due towards the end of this month, but it looks like the trends are continuing.

Meanwhile, grassroots pressure on sheepmeat processors continues. Small groups of producer shareholders are trying to force the boards of both cooperatives Silver Fern Farms and Alliance to show they have seriously considered the merger options presented in Meat Industry Excellence’s ‘Pathways to Long-Term Sustainability’ report, or to make moves to seriously re-examine its contents, before exploring foreign investment options.

Meanwhile, the former sheepmeat-only processor and exporter Blue Sky Meats, which recently announced a 36 percent lower after-tax profit for 2015 over last year, has quietly stretched its resources to beef and venison. It recently announced a joint marketing/processing venture with venison processor Duncan (NZ) Ltd and late last year acquired the former Clover Exports plant in Gore.

The venison industry’s Passion2Profit programme, supported by the Government’s Primary Growth Partnership, gives an indication of how the meat processors might approach future collaborative market development work, having turned down working on a marketing entity with Beef + Lamb NZ.

Red Meat Sector Conference logo no dateGet along to the fifth Red Meat Sector Conference in Nelson at the end of this month to hear lots more about domestic and international trends. You can register at

This is the editorial from MeatExportNZ’s July Prime Cut newsletter. If you would like to subscribe for future issues, fill in your details in the newsletter box on the front page, or in the pop up.¬†

Be the first to comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: