Rollercoaster ride for red meat prices
The value of New Zealand’s red meat exports last year suffered an 11% drop to $10.2 billion, compared with the 2022.
That’s the view of the Meat Industry Association (MIA) chief executive Tim Ritchie on the appointment of Jeff Grant to support the industry’s position on Brexit. Grant’s role is funded by the MIA, Beef + Lamb NZ and Agmart.
Ritchie says given the nature of Brexit it is hard to do anything remotely from NZ; instead the industry needs someone on the ground who can “live and breathe” things in that region, “given the importance of that market, especially for lamb”.
Grant will move to London, likely by June. He will first make sense of Brexit and later get involved in the broader issue of supporting the NZ government to obtain free trade agreements (FTAs) with the European Union (EU) and the UK.
Ritchie says no-one knows whether it’s going to be a ‘hard’ or ‘soft’ Brexit and how this all may impact NZ.
“Until that is clarified it’s hard to know how we might or might not be caught up and where the challenges are,” he told Rural News.
“It seems very sensible for the meat companies to put their hands in their own pockets and to work with BLNZ to jointly fund a person in that part of the world for the next couple of years. Given so many balls in the air you can’t sit back and navigate it from here; you need to be much closer to the centre of the action.”
Ritchie says having someone focused solely on the meat industry will leave nothing to chance.
A big issue for the NZ meat industry is its EU quota -- enshrined in the GATT -- for 228,000 tonnes of sheepmeat. In particular are the ‘tariff rated quotas’(TRQs) -- a flexible arrangement under which NZ sheepmeat may be exported to all EU countries including the UK. But current discussions may split this between the EU and UK – a proposal NZ opposes and which Grant will have a role in sorting out. The UK may not necessarily be our friend at court on this issue.
Ritchie says the meat industry sees the TRQs as a major issue.
“These are enshrined in the GATT and so that gives us a legal right -- from the industry’s point of view it is non-negotiable.
“At the same time, we’re not looking to game the situation ourselves. All we want to do is preserve what we’ve got and what we have already paid for, to act in the markets on the continent and UK in a way that retains the stability built up over the years.”
Of particular concern to NZ is the UK market where NZ lamb has been sold for over a century, although the way it is sold today is far cry from the even as recently as 40 years ago.
Tensions have always existed in the UK market -- from local UK farmers or Irish, but the advent of Brexit has added to the confusion, Ritchie says.
“From our point of view the UK remains an extraordinarily important market especially for chilled legs of lamb. No other market in the world that can take the quantity and provide the returns the UK does.”
Stability the key
BLNZ chair Andrew Morrison says maintaining stability in the UK and European markets is critical for NZ and European lamb producers.
Like Tim Ritchie, he supports the needs for the TRQs to remain as is. He says irrespective of the political ramifications, market stability must remain.
“Stability is in the best interests of ourselves and others producers – be they in the UK, Ireland or France. We want the best product on the shelves for 12 months of the year. We do not want to damage lamb as a meat category while these political issues are being sorted out,” he told Rural News.
Morrison says Grant will talk to farmers in the EU to try to get agreement on a sensible approach to how the red meat trade might continue. He says Grant will work closely with MFAT and MPI and with BLNZ’s representative in Brussels, Ben O’Brien.
