While the hills in Central Hawkes Bay remain green, which is remarkable for this time of the year, Porangahau farmer Sam Clark and his wife Gudrun are on the lookout for drought.
BLNZ chief executive Sam McIvor says with the signing of the CTPPP, NZ will get the first round of tariff cuts in the Japanese beef market on December 30 and a second round of cuts that start January 19 next year.
McIvor says NZ lost out badly to Australia when it managed to get a FTA with Japan, but with the signing of the CTPPP – which includes Japan -- NZ meat exporters hope to save about $63 million in tariffs.
“Since Australia got its FTA with Japan, our exports there dropped by about $23 million while Australia’s went up by about $1 billion,” McIvor told Rural News. “That was the advantage Australia had over us.
“Even though the tariffs on our beef will now come down it is not as simple as just turning up in the market. The Australians have invested heavily and done a lot of market promotion in Japan and obviously they have built up product loyalty.”
McIvor says the other advantage of CTPPP is that the 26.5% tariffs on 26,000 tonnes of NZ beef exports to Canada will also come off over the next six years.
Meanwhile, he says, there’s good news in affluent consumers’ moving away from industrially produced to naturally produced food, and grass fed animals are part of that.
“The opportunities for grass fed products are starting to emerge so we think having a lower tariff rate and being more competitive means we have probably got as good an opportunity as we have ever had.”
McIvor points out, however, that the term ‘grass fed’ is quite often used rather loosely and NZ is using its Taste, Pure, Nature brand to tell consumers that our product is the genuine article and is backed by provable facts.
Beef farmers want free trade
During his recent overseas travels, McIvor attended the annual meeting of International Beef Alliance in Canada. Member countries of the Alliance are NZ, Canada, Mexico, Paraguay, Brazil, Australia and the US.
A key outcome of the meeting was agreement by all members on the need for greater trade liberalisation.
“There was strong condemnation from the Beef Alliance of the EU and the UK of the way they are going about splitting the trade quotas for NZ’s sheepmeat and beef to those jurisdictions,” McIvor told Rural News.
“Alliance members support NZ’s position that the way the quotas are being split is illegal and contravenes WTO rules.”
He says the Alliance has a farmer base and is not tied to the politics of the governments of members.
One reason why the initial TPP got off the ground was because of the strong trade liberalisation stance taken by International Beef Alliance, McIvor says. While some countries, including the US, protect their agricultural producers, the Beef Alliance has always been a vocal supporter of free trade.