Red meat rebound
The red meat sector is poised for a strong rebound this season, with export receipts forecast to top $10 billion and farm profitability to almost double.
The forecast for global sheepmeat and beef demand is positive for the 2021-22 season supported by solid market fundamentals, strong demand and tight supply, according to Beef + Lamb New Zealand’s (B+LNZ) New Season Outlook 2021-22.
“The outlook is positive. Fundamentals in key markets are solid, as strong demand and tight supply mean prices in export markets are forecast to lift for both sheepmeat and beef,” says B+LNZ’s chief economist Andrew Burtt.
The outlook also forecasts average farm profit before tax to lift 9% in 2021-22, reflecting a 4% lift in gross farm revenue and increasing sheep revenue, including a modest lift in wool prices.
“However, the forecast for a stronger New Zealand Dollar (NZD) will offset some of the buoyancy in New Zealand’s overseas markets and therefore limit increases in farm-gate prices,” Burtt explains.
China remains a critical driver of red meat export performance in 2021-22.
“Demand from China and the US underpinned solid export returns in the latter part of the 2020-21 season as the economic recovery in both countries has been rapid and fuelling consumer confidence.
“China’s demand for meat protein continues to be fuelled by pork shortages that have resulted in African Swine Fever (ASF) and also continues to be supported by growing consumer incomes and urbanisation,” says Burtt.
“Overall, the positive outlook is underpinned by the global economic and foodservice recovery and tightening global beef supply.”
The challenge in the new season remains the disruptions to supply chains and increased freight costs that are related to the global Covid-19 pandemic, the spread of the Delta variant and the impact on economic recovery.
B+LNZ forecasts New Zealand’s receipts from exporting red meat will be about $8 billion, slightly down on 2020-21. While lamb export receipts are forecast to increase by 2.2% on 2020-21, beef and veal export receipts are forecast to decline by 7%, driven by a decline in production and the adverse impact of the high NZD on export values.
“The red meat sector’s exports are critical to the New Zealand economy, and the COVID-19 uncertainty reinforces the need for stable and predictable domestic regulation to avoid putting pressure on the red meat sector.”
Farmer confidence is mixed. While on-farm profitability is positive, resilience is being tested by the volatility of adverse weather events and the extent of environmental regulation.
Farmers are expected to spend an average of $491,300 on goods and services for their farms, up 3 percent on 2020-21.
Newly elected Federated Farmers meat and wool group chair Richard Dawkins says he will continue the great work done his predecessor Toby Williams.
Hosted by ginger dynamo Te Radar, the Fieldays Innovation Award Winners Event put the spotlight on the agricultural industry's most promising ideas.
According to DairyNZ's latest Econ Tracker update, there has been a rise in the forecast breakeven milk price for the 2025/26 season.
Despite the rain and a liberal coating of mud, engines roared, and the 50th Fieldays Tractor Pull Competition drew crowds of spectators across the four days of the annual event.
Nationwide rural wellbeing programme, Farmstrong recently celebrated its tenth birthday at Fieldays with an event attended by ambassador Sam Whitelock, Farmers Mutual Group (FMG), Farmstrong partners, and government Ministers.
Six industry organisations, including DairyNZ and the Dairy Companies Association (DCANZ) have signed an agreement with the Ministry for Primary Industries (MPI) to prepare the country for a potential foot and mouth outbreak.
OPINION: ACT MP Mark Cameron isn’t everyone’s cup of tea, but he certainly calls it how he sees it, holding…
OPINION: Did former PM Jacinda Ardern get fawning reviews for her book?