NEW ZEALAND

New Zealand's red meat industry faces continued challenges

Beef + Lamb New Zealand (B+LNZ) has published a market insights report detailing the current and projected state of New Zealand’s red meat exports to China. The report highlights several key factors influencing market conditions and when we may expect to see conditions improve.

Posted on Jun 21 ,00:10

New Zealand's red meat industry faces continued challenges

Currently B+LNZ does not anticipate any significant turnaround in Chinese demand for red meat in the short term.  

Sheepmeat prices, in particular, are predicted to remain at multi-year lows, as New Zealand competes with strong Australian exports and abundant domestic pork supplies in China and the Chinese economy remains weak. 

As China is New Zealand’s largest market for sheepmeat by far, our domestic lamb and mutton farmgate prices are highly correlated with the value of sheepmeat  exported to China. 

Sheepmeat prices in China are now lower than during the 2016-17 season when prices first began to accelerate. 

At this stage, China’s economy is not expected to rebound for some time because of continuing problems in the property sector, and low consumer sentiment is likely to stifle domestic demand and activity. 

The Chinese economy, however, is notoriously opaque and hard to predict.  The number of official indicators that are released about the economy has reduced significantly in the last year.   

The Chinese economy therefore could improve more quickly than currently expected.  Much will depend on growth in the rest of the world and whether that can help boost China’s manufacturing exports and economy.  

Despite these short-term challenges, China’s economy is projected to recover in the medium term and as it rebounds so too will the disposable incomes of the largest middle class in the world.  

"We know times are tough right now and farmers are looking for certainty coming off a tough financial year last year. Unfortunately, it doesn’t look like there will be much relief this financial year, especially for sheepmeat farmers", says Sam McIvor, chief executive of B+LNZ.  

"We know the market will turn though; it is not a question of ‘if’ but rather of 'when'". 

However, the exact timing of market recovery remains uncertain. Geopolitical factors, such as trade tensions between China and the US and EU, add further unpredictability to the outlook. US President Biden recently imposed significant tariffs on imports from China and the EU is considering its trading relationship with China. 

Since New Zealand and China established a Free Trade Agreement, which was a world first, China has progressively developed into a vital market for New Zealand red meat. In the 2022-23 meat export season, nearly half of New Zealand’s lamb exports were to China.  

"Our report highlights the challenges and opportunities within the Chinese market. 

"The fundamentals of our safe, nutritious product remain, and our farmers will be looking forward to an improvement in the conditions and the resulting uptick in exports that will result", adds McIvor 

The report also examines the broader economic context, consumption drivers, foodservice performance, and the competitive landscape, offering an analysis of China’s red meat production and import dynamics. 

 NEWSLETTER - Stay informed with the latest news!

Comments





Similar articles

CHINA

Topigs Norsvin and Muyuan Foods start a nucleus farm in China

The new high-health nucleus farm will have a capacity of 1200 sows and will house both maternal a...


Read more Read more
USA

US invests $110 million in meat and poultry processing

U.S. Department of Agriculture (USDA) Secretary Tom Vilsack announced that the Biden-Harris Admin...


Read more Read more
AUSTRALIA

Better prices moderate sentiment in Australian sheepmeat sector according to survey

However, sentiment has improved in the among sheep producers since the last survey in October 202...


Read more Read more
Websolutions by Angular Software and SpiderClass