China's demand for meat sets record for NZ exports
The increased demand of China for New Zealand’s beef, lamb and mutton are forecast to propel both sheepmeat and beef exports past the $4 billion ($2.5 billion) mark for the first time, according to a press release from Beef+Lamb New Zealand.
New Season Outlook 2019–20 report issued by Beef + Lamb New Zealand forecasts beef, lamb and mutton prices to lift from historically high levels, helped by continuing strong export demand and an expected weakening of the New Zealand dollar.
“We have forecast increases in farm-gate prices for beef, lamb and mutton in 2019-20 because small increases in in-market prices are expected to be further assisted by an easing of the New Zealand dollar,” says B+LNZ Chief Economist Andrew Burtt.
Beef and veal exports are expected to be up 5.9 percent to $4.17 billion and sheepmeat up by 4.9 percent to $4.23 billion.
This would add another $430 million in export earnings for red meat and offal following an extra $228 million and $1.23 billion in the two seasons prior – excluding fibres and other products.
This follows the exceptionally strong farm-gate prices for lamb and mutton since the 2016-17 season. Beef prices have been steady since farm-gate prices jumped in 2014 15 but are expected to be up in 2019-20.
African Swine Fever (ASF) will have significant ramifications for global meat supplies and consumption. China is the world’s largest consumer of pork – making up around 63 percent of consumption. However, New Zealand’s growth in the export value of red meat and volume began before the Chinese ASF epidemic. “The growth in China’s red meat import demand is built on genuine demand growth as consumption has outpaced domestic production growth,” says Burtt.
New Zealand and Australia dominate international trade in sheepmeat. Australia is expected to enter a period of flock rebuilding – weather permitting – driving significant declines in their production.
New Zealand’s export lamb production in 2019-20 is forecast to be steady as a minor increase in lambs available is offset by an easing average carcase weight from record weights in 2018 19.
The New Zealand lamb crop for spring 2019 is forecast down. With the breeding ewe flock stable, a smaller portion of ewe lambs will be retained making more available for processing.
Mutton export production in 2019-20 is expected to be up 8.7 percent as more ewes are available for processing, however, this was from a low base in 2018 19 and when more ewe hoggets were retained. ASF in China is most likely to benefit New Zealand’s beef processing cuts, which are a more apparent substitute for pork. Sheepmeat and other beef cuts are generally in the premium segment of the Chinese animal protein market.
New Zealand has a longer, deeper and more favourable trade relationship with China than the four larger beef trading countries – India, Brazil, US and Australia. The short to medium-term outlook for New Zealand’s beef exports are looking solid with signals that the US and Australian breeding cow herds could be entering downward phases of their production cycles. New Zealand’s beef and dairy cattle herds are expected to remain relatively steady and will lift total export production by 2.0 percent, largely due to a lift in steers and heifers processed. New Zealand’s beef cattle herd grew by 2.6 percent to 3.82 million head at 30 June 2019
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