NZ Red Meat Exports Hit $867m in August, Up 23%
New Zealand's red meat and fifth-quarter exports reached $867 million in August, up 23% on the same month last year, as stronger returns lifted earnings across all major markets.
That was the message from Meat Industry Association chair Nathan Guy in his opening address at last week's Red Meat Sector Conference in Wellington.
He told the 300 delegates that many good things are happening in the sector and pointed to the investment taking place in the sector - notably the Irish meat processing giant Dawn Meats taking a 65% shareholding in Alliance and ANZCO taking over the successful Greenlea Meats.
The theme of the conference was 'managing volatility', appropriate given the myriad of geopolitical events impacting the red meat sector at present. But Guy insists that the industry is nimble and agile.
"We have always faced headwinds, but it just so happens they are blowing pretty hard in our face at the moment," he told Rural News.
"We are worried about the US investigation to ours and Australian lamb exports there and claims that these are 'injuring' American lamb producers," he says.
The sheep flock in the US is a mere five million, and Guy says NZ does not believe that its exports to the US are impacting negatively on their sheep producers. Rather he says our lamb goes into their market at a time when American lamb is not on supermarket shelves and there is a strong argument that having lamb on shelves for 12 months of the year is beneficial to all parties.
He says other challenges are the high cost of diesel and rising freight costs, which are impacting on profitability right across the sector. Another problem is the proliferation of non-tariff trade barriers - or specific rules that countries we export to impose on us to protect their own producers.
"These are costing us $1.5 billion a year and we are working closely with MPI and MFAT to eliminate these," he says.
Despite the volatility, there are many positives emerging. The conference heard from a variety of experts in market intelligence and international trade, including Simon Quilty and Brett Stuart from Global Agritrends who pointed to a positive outlook for beef exports to the US.
Making a video appearance at the conference was the former CEO of Air New Zealand, Greg Foran, who now heads up Kroger - a large US company which runs supermarkets, manufacturing facilities and other retail outlets.
One unexpected insight from him was the fact that about 12% of Americans are now on weight loss drugs - a trend likely to continue. This has positive implications for NZ because people need high-quality protein which our beef offers.
Guy says NZ can meet this need immediately, although he says our processing companies may need to reduce the size of the portions of the meat they supply.
Immediately after the conference, Guy in his capacity as NZ's special trade envoy left for India, taking a delegation of representatives from the primary sector to progress the benefits of the recent India FTA that comes into force later this month. While he'll be supporting the apple and pear, kiwifruit and honey sectors, he also plans to attend a wool and textile expo and take part in a lamb promotion.
"The timing of this trip is perfect because there's a lot at stake and a need to build the relationship with India," he says.
