Tuesday, 13 February 2024 08:55

Rollercoaster ride for red meat prices

Written by  Peter Burke
Meat Industry Association chief executive Sirma Karapeeva. Meat Industry Association chief executive Sirma Karapeeva.

The value of New Zealand’s red meat exports last year suffered an 11% drop to $10.2 billion, compared with the 2022.

But according to the Meat Industry Association (MIA), this was despite the fact the actual volume of meat exported was up.

The drop in value, according to Meat Industry Association chief executive Sirma Karapeeva, was mainly due to tough economic conditions and inflationary pressures in many of our key markets.

“Consumers around the world still want to buy red meat but they are not paying as much for it,” she says.

Karapeeva says increased supply from other exporters, including a significant increase in Australian sheepmeat exports, also had an impact. She says the top five markets were unchanged from 2022, but the value of New Zealand exports was mostly down, reflecting the overall trend.

The bogey man in the equation is China – NZ’s largest market – where exports fell 16% to $3.6 billion.

It continued to be NZ’s largest sheepmeat market at 216,079 tonnes – 56% of total sheepmeat exports. Volumes rose by 10% but value also fell 10% to $1.4 billion.

But Karapeeva says China has now cut tariffs on Australian sheepmeat exports there, meaning NZ no longer enjoys a tariff advantage in the market. At the same time, China remains NZ’s largest beef market by volume at 203,509 tonnes, but this is down 6%.

“The weak Chinese economy, high inventory levels and large volumes of Brazilian exports saw value drop 26 percent to $1.56 billion,” she says.

In terms of sheepmeat, the US, our third largest market by volume at 27,567 tonnes but the second largest by value at $544 million, is a concern. In the past year, volumes exported to the USA fell 5% and 8% by value.

The UK, the second largest sheepmeat market at 30,133 tonnes, was down 7% by volume and 29% by value to $291 million.

“The drop was mostly due to the effect of high inflation and food prices on consumer spending, with some impact from increased Australian supply following Australia’s FTA with the UK coming into force mid-year,” says Karapeeva.

Overall beef exports showed signs of recovery with volumes up by 7% but the value fell 9% to $4.4 billion. However, there was a significant recovery of beef exports to the US.

Drought conditions that led to high US domestic production during 2022 eased in some regions and New Zealand and Australia benefited from the increased demand, with both having good quota access.

Karapeeva says NZ’s beef exports to the US grew by 46% to 181,040 tonnes and 28% by value to $1.6 billion.

Finally on the positive side, she says the NZ red meat sector has a diverse export market strategy and this has helped mitigate the impact of the weakening demand and pricing in any one single market.

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