Chinese dairy giant Yili will pay $588 million for dairy co-op Westland Milk, it was announced overnight.
The pilot is part of a six-month trial negotiated by the government to test chilled red meat access into the China market.
While small-volume air-freight product has been sent into market, it is understood that this is the first sea-freight container to test the market says Silver Fern Farms general manager sales Grant Howie.
“It is important that during this trial period we test the market’s protocols and supply chain for chilled meat at sea-ports as well as via air-freight,” Howie says.
“With chilled product in China we need to test the process at scale which is why we have worked with one of our customers to take a full 20ft container of chilled product.”
The first sea-freight container leaves New Zealand this week and is due to arrive into China in early September.
Howie says its relationship with Chinese shareholder Shanghai Maling has helped facilitate this sea-freight order.
“We are working with one of Shanghai Maling’s subsidiaries who will distribute Silver Fern Farms chilled beef to a number of its supermarkets in and around Shanghai.
“The cuts they are taking are important. They are primarily secondary cuts of prime Beef – cuts that would otherwise have been sold frozen at lower prices. They have the capability to position these traditional Chinese cuts at a premium in supermarkets.”
Silver Fern Farms is New Zealand’s largest meat exporter to China, having achieved $316m of sales to the region in 2016. All of the product entered the market in frozen form.
Silver Fern Farms is also testing protocols for small-scale air-freight orders of beef into key food service distributors who service high-end restaurants and hotels in Shanghai, Guangzhou and Shenzhen and an airfreight order for lamb cuts into a major multi-national high-end supermarket chain.
“For the past 2 years we have been busy developing the premium food service market with our Eating Quality (EQ) Graded Silver Fern Farms Reserve Beef as a frozen product. Our Reserve and Angus Beef frozen programmes are aged for 21 days back in New Zealand before being shipped frozen. Now that we have the ability to ship chilled, that ageing can now occur as it is shipped to China,” says Howie.
“This is a complex large scale chilled pilot to test a variety of market entry options as well as a range of products. We have two air-freight orders destined for our food service customers in Shanghai. They have ordered our value added Silver Fern Farms Reserve Beef, and our food service chilled prime beef product in primary and secondary cut form. They are taking steak cuts, our Silver Fern Farms Reserve oyster blade and rump caps.
“We have also partnered with a major multi-national high-end supermarket chain for an order of lamb cuts, including premium lamb racks. We look forward to further orders at scale so we can test sea-freight container orders once the new season lamb production comes on in coming months.”