Red meat exports slump, thanks to China
Weaker pricing and demand from China continue to impact New Zealand red meat export earnings.
Despite major challenges, New Zealand primary sector exports are holding up well. And it's not just dairy products leaving our ports in droves - beef, apples, kiwifruit, wine and sheepmeat are also being shipped out.
According to BNZ's latest Rural Wrap, NZ primary sector exports have been impressively resilient to the massive global economic shock over the past 12 months.
BNZ senior economist Doug Steel points out that exporters have been facing considerable challenges - many of which are ongoing.
"Difficulty finding labour and logistical issues immediately spring to mind. No on has been immune," he says.
"But the sector, by and large, has found ways to minimise disruption, switch markets, and alter sales channels to continue trading as best as possible."
While export revenue does not necessarily equate to profitability, but it can be a useful barometer, noted Steel.
Wine exports to February 2021 were 4% higher than a year earlier, entirely driven by volume expansion, with prices marginally lower over the period. Annual wine exports are now valued at $2 billion.
Steel says the past year's growth - in obviously difficult circumstances from harvesting through to logistics - continues a period of persistent expansion that now extends back more than quarter of a century.
Sheepmeat exports topped $3.8 billion. This is a historically high level, although 3% lower than in the previous year.
Steel says prior price declines, a firmer NZ dollar and a smaller lamb crop this season will likely see annual exports ease further in the near term.
"Demand from China has been strong of late which we expect to continue."
Around half of NZ exports are now destined for China.
Kiwifruit continues to go from strength to strength, with exports nearing $2.7 billion in the year to February 2021, a hefty 18% higher than a year earlier.
Steel says buoyant growth is the result of overall record volumes in combination with higher prices, both underpinned by strong demand.
Beef exports eased back 2% in the year to February 2021, but Steel says this should be seen in the context of the 34% cumulative increase in the three years prior to that. NZ's beef export share to China has eased from a recent African Swine Fever-induced peak but remains high by historical standards.
Apple exports pushed above $900 million, up nearly 6% on a year earlier.
Steel says the increase reflected a moderate increase in volumes, following a good harvest and a push higher in average prices.
However, things are looking dire for apple growers this season: poor weather and labour shortages could drop export volumes by 14%.
