China’s new beef tariffs expected to favour New Zealand exporters
Additional tariffs introduced by the Chinese Government last month on beef imports should favour New Zealand farmers and exporters.
Boulton told Rural News 2024 was a challenging year for the company and represented a game of two halves.
He says in the first half of the year there was good livestock throughput, but market prices were low and in the second half of the year, livestock volumes fell as predicted and prices improved.
"So SFF were on the wrong end of the situation at both ends of the year," he says.
But Boulton says things have now changed for the better with improved livestock procurement and the company is now trading ahead of budget. He says SFF has implemented a range of cost saving measures and efficiencies. He says at the same time, prices are better and confidence is rebuilding in the sector.
"Talking to farmers and others at the recent agricultural shows, they are saying the fun is coming back into farming and that is really pleasing. Farmers are spending money again and we see that continuing as we look out into 2025 and beyond," he says.
Boulton says SFF was closely monitoring the geopolitical issues and in particular what effect the Trump administration's trade tariffs may have on NZ. He says they have been working up several scenarios and planning to deal with any possibility which may arise. He says it's not just the direct tariffs in NZ, but the consequences that tariffs on other countries may have on the global supply of protein.
"We may see a significant shift of volume out of the US into other key markets which may cause a drop in prices globally. But at the same time, we can't ignore that the fact that long term the demand for protein is going to outstrip supply and things will normalise in time," he says.
Boulton says SFF will just have to be prepared for when and whatever announcement is made and respond quickly, which they have done historically. He says the aim will be to make sure that they minimise the impact on farmers.
"But we also can't also ignore the fact that there may be some upside here for NZ if there are large tariffs on other countries. This could create situation where there may be a bit more demand for our product in the US for example," he says.
Boulton says they need to be just as agile to capture the upside as well which could have a positive outcome for our farmers and businesses.
"Everything is a little bit unpredictable but there is certainly going to be some interesting times in the next little period," he says.
