Farmers in mood to spend as farmgate prices rise
Don't be surprised if there is a bit more spending at the Central Districts Field Days this year.
A report by the Meat Industry Association (MIA) says exports to China, our largest red meat export market by volume and value, declined 31% to $191m.
This came on the back of weak consumer demand, continued imports of large volumes of Brazilian beef and greater volumes of competing Australian sheepmeat.
MIA chief executive Sirma Karapeeva says there was a drop in the value of both sheepmeat and beef exports compared to October 2022. She says sheepmeat export volumes grew but the value decreased. Karapeeva says the main problem is an increase in Australian and exports, which is impacting global prices and hence affecting NZ sheepmeat exports.
"After a period of flock rebuilding, Australia is now going through a liquidation phase, which has been exacerbated by dry conditions in parts of Australia in recent months. Over the last three months Australia has exported 30,000 tonnes more sheepmeat than it did in the same period last year."
Karapeeva explains that Australia's flock liquidation has resulted in a significant increase in Australian sheepmeat exports to China this year, which is putting pressure on prices. In October, Australia exported more than 16,000 tonnes to China, 37% more than it did in October last year.
"While our sheepmeat export volumes grew by 17% to 26,170 tonnes, the value decreased by 6% to $264m. The largest drop was to China, down 20% to $97m," she adds.
The volume of beef exports in October was unchanged from last year, but the value dropped.
Karapeeva says the largest decrease was in exports to China where the combination of that country's weak economy and large import volumes from Brazil has affected pricing and demand.
Canada continued to be a strong market with overall exports increasing by 57% to $34m. Exports to the UK also increased, up 44% to $23m.
"This was partly due to the recovery in sheepmeat exports from the low levels of last October, but it was also due to the steady growth of beef exports under the NZ-UK Free Trade Agreement."
In terms of beef, MIA says exports to the US were up 22% to $61m and by 65% to Canada to $15m.
However, Karapeeva says this was not enough to offset the weak demand in China, with beef exports to that country down 41%. This was further amplified by weak demand in the other key North Asian markets of Japan and Korea.
