PrimeCut: Plenty of disruption ahoy!

Disruption

As we move towards the end of the first quarter, 2019 has certainly started at a cracking pace for the red meat sector, with trade issues, climate change and people forefront. There is plenty of disruption on hand to keep everything interesting and fresh!

All eyes are on the UK primarily, of course, as the country moves towards Brexit at the end of this month, or possibly later, and the subsequent potential fall-out for other markets, not only in Europe. Meat exporters have been keeping a very close eye on what is happening in the region and have been judging their deliveries accordingly. The last shipment of chilled product before the key European Easter season has left these shores and is on its way to customers in the market. We’ll have to wait and see what the fallout will bring as the fluid situation seems to change daily.

At the December year-end, Meat Industry Association analysis of the export figures show the UK retaining the second spot in the top 10 markets for sheepmeat at over $472 million, accounting for 12 percent of the total shipped. While the UK retains the top export destination for New Zealand’s chilled lamb (just over $252 million, accounting for 21 percent of exports), it has slipped back to third, behind China and the US, in exports of frozen sheepmeat, accounting for just eight percent of the total, worth $220 million.

ANZCO is one of the companies warning suppliers of “considerable ongoing uncertainty” because of Brexit. “Marked indications are that lamb, in particular, will come under pricing pressure which could be further impacted by currency concerns relative to the GB pound,” says chief executive Peter Conley.

At this point … well, thank goodness for China! The market continues its ascendancy and accounted for 31 percent of export value earned from New Zealand sheepmeat at $1.1 billion in 2018. In addition, the second round of Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) tariff cuts will come in on 1 April, evening out the playing field in Japan for New Zealand’s beef exports against our competitors.

A timely and fact-filled presentation to trade and government officials from European research agency GIRA director Richard Brown yesterday, came with some relief. Despite all the negative noise emanating from certain areas of the world, his slides showed demand for and consumption of red meat is still continuing to rise, especially in Asia. An outbreak of African swine fever (ASF) affecting pork production, which started in mid-Europe where it is now resolved, is now out of control in China, he believes. This will disrupt global meat trade in the coming two or three years to the advantage of New Zealand (and Australian) beef and sheepmeat suppliers as buyers look for alternatives to pork (more on that later).

As generations change, there is plenty of head-spinning disruption – and also plenty of disruptors intent on impacting the sector – which is why we all need to keep moving forward, be aware of what is happening around us and take part in the conversation.

I’m one of those looking forward to seeing evidence of plenty of innovation in meat technology and science at next week’s meat technology workshops in Hamilton.

A recent independent review found the internationally-renowned NZ Agricultural Greenhouse Gas Research Centre (NZAGRC) which is well supported by this sector, a scientific success and an effective use of funds it is allocated. Results are starting to come forward. AgResearch recently announced the successful breeding of the first lower methane burping sheep to be sustainably produced without negative impact on the animals. The 8th and 9th of April will be the place to find out more about these and New Zealand’s progress in climate change matters at the NZ Agricultural Climate Change Conference in Palmerston North.

Finally, this sector is built on the passion of its people, but we must not be complacent about them.

The Meat Industry Association is working on finding more people for the meat processing sector. However, the Coalition Government’s plans to fix the polytechnics – which to be fair did need to be addressed – is in danger of dragging in the Industry Training Organisations (ITOs). This potentially could affect the career pathways into the sector. Industry is watching carefully as consultations are underway.

A new group focused on women working in the post-farmgate sector kicked off last month. Meat Business Women aims to provide a networking platform for women working in the post-farmgate part of the industry.

In addition, some really excellent examples of excellence in Māori sheep and beef farming, raising awareness of their contribution to the sector, are being celebrated through the 2019 Ahuwhenua Trophy. Finalists were announced last month, and judging will take place next month.

We can disrupt the disruptors, by keeping agile and proving the sector is a dynamic, modern industry taking on the world. It’s a good challenge!

 

 

 

 

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