November 27, 2023

New Zealand has seen declining demand from its closest markets for red meat despite growth elsewhere. This resulted in September exports falling by 18% versus September 2023.

By value, NZ$617 million (US$375 million) of red meat left the country during September, with global markets remaining relatively weak, according to the latest analysis from the country’s Meat Industry Association (MIA).

There was an upward export trend to Canada, the United Kingdom, and Saudi Arabia, but falls to Asia Pacific markets such as Australia China, Japan, South Korea, and Taiwan, as well as a slight decline to the United States. According to MIA’s CEO Sirma Karapeeva, the overall drop was partly a result of the high export comparison seen in September 2022, but it also reflected ongoing difficult economic conditions now being seen in many major markets in Asia.

China and Australia are major drags

“China, in particular, continues to be challenging with overall exports in September of NZ$187 million, down by 31% compared to last September,” said Karapeeva. Australian exports were equally poor, also declining by 31% which MIA put down to destocking by Australian farmers due to high levels of domestic meat production but also in anticipation of expected dry conditions driven by El Niño.

One positive was the UK market where overall exports were up by 33% to $17 million. “This was partly a result of a recovery of sheep meat exports from the low levels last September, and the continuing growth in beef exports with the improved access under the Free Trade Agreement,” said Karapeeva. However, it is not nearly enough to offset the big declines seen in China.

New Zealand red meat export need a reboot.

A start performer in September was Saudi Arabia where red meat exports grew significantly at 185% to $16 million, putting it at almost the same level as the UK. The driver for the Middle East country, which is boosting its travel and tourism market in the coming years, was growth in sheep meat exports.

Elsewhere in the western hemisphere, MLA said that North America was “generally positive” mainly due to an increase in beef exports. For example, exports to Canada increased by 16% to $26 million helping to slightly offset a 3% drop to the US, to $142 million. This was mainly due to a significant reduction in tallow (a rendered form of beef or mutton fat processed from suet) compared to September 2022.

In Asia, September shipments of red meat to Japan were down 4% to $27 million during September; down 27% to $19 million to Taiwan; and down 26% to $12 million to South Korea.

Taking a big third-quarter hit

MIA New Zealand red meat brieifing
MIA’s briefing document front cover (link in main text).

The September numbers pushed overall red meat exports for the third quarter down by 21% to $2.1 billion versus the same period last year. Karapeeva commented: “There was a decline in exports to China and the other North Asian markets, which has only been partly offset by growth in exports to North America.”

In the three months to September, Chinese exports fell by 42% to $642 million; Japanese exports by 31% to $88 million, Korean exports by 36% to $48 million, while Taiwan was marginally down by 4% to $75 million. In comparison, exports to the US rose by 15% to $551 million and they were even better for Canada, up 72% to $98 million. Most of the North American growth in the quarter came from beef as a result of a decrease in domestic beef production. There were also some sheep meat increases.

In terms of an annual comparison, exports for the year to 30 September were $10.2 billion, down 11% on the same period last year. Overall, New Zealand’s red meat exports to most of its major markets decreased, though there was a small increase to the US (up 2% to $2.4 billion), and Canada, up 7% to $275 million.

The MIA has been calling for the New Zealand government to put agriculture and the production and export of beef and lamb at the heart of a new economic strategy. Its Putting Meat on the Bone’ briefing to ministers has sets strategic challenges that it says New Zealand must grapple with to improve the prosperity of the country.

“Agriculture is our only industry of scale and one area where New Zealand has a significant comparative advantage on the world stage,” said MIA Chair Nathan Guy. “The red meat sector makes a massive contribution to our economy. With the right policy settings, we could grow this substantially, but it requires government to help facilitate growth and not hinder it.”

{Lead image credit: Jason Leung/Unsplash]

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