Birth woes
OPINION: What does the birth rate in China have to do with stock trading? Just ask a2 Milk Company.
That's the assessment of Meat Industry Association (MIA) chair Nathan Guy following the release of its annual report last week.
The report is anything but glowing on events in the past year which saw red meat exports in the 12 months from June 2023 to 2024 fall by 7% to $9.9 billion. The report also noted that exports to NZ's biggest market China fell by 32% to $2.86 billion. But on the positive side, exports to the US were up and exports to the UK recovered from low levels in the previous year.
In his forward to the report, Guy noted that the red meat sector continues to be tested on all fronts and is not helped by a complex geopolitical environment, increased competition in key markets and changing spending habits of consumers.
"China has been more depressed as a market than anyone thought it would be and the Covid lag has taken a longer time than expected to work through. There are 42 countries now who have similar free trade access to China as NZ and it's a very congested market," he says.
But despite the rather bleak news, the ever-optimistic Guy says there are many positives emerging and he believes the worst is over.
"There are what I call come 'green shoots' appearing, such as improved beef prices and a sense that lamb will come back. I am optimistic that we have bounced off the bottom," he told Rural News.
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Looking to the future, Guy says the first thing that needs to happen is to get costs behind the farm gate reduced.
He says sorting out the issue of climate change and the lowering of the official cash rate (OCR) are key factors. The other issue related to climate change, he says, is to get the settings right and stop the proliferation of pine trees which is to the detriment of the red meat sector - taking land that should be used for livestock production.
"Stock numbers has always been an issue for the meat companies and NZ. There needs to be sufficient capital stock to produce the offspring that is going to go through the works. This is not a new issue and is a concern, but companies are nimble and have dealt with this before," he says.
Labour is also signalled in the MIA annual report as an issue, with immigration settings for overseas workers an ongoing problem.
