Wednesday, February 21, 2024

Red meat returns down even as export volumes rise

Neal Wallace
Biggest drop in earnings came from Chinese market, with 16% plunge.
International markets have been mixed, with prices and demand for red meat – especially sheepmeat – falling in the first four months of the seasonFile photo.
Reading Time: 2 minutes

New Zealand exported more red meat last year but returns fell 11%, reflecting soft global markets.

Data from the Meat Industry Association shows the volume of sheepmeat exported in 2023 rose 3% and beef 7% but combined returns of $10.2 billion were 11% less than 2022.

The biggest drop in red meat returns came from China, where the fall was 16% to $3.6bn. There was an 8% increase in returns from the US at $2.5bn, due to stronger demand for beef.

For the year NZ exported 384,239 tonnes of sheepmeat, but the value fell 14% to $3.7bn, and 511,680t of beef, with the value falling 9% to $4.4bn.

Sirma Karapeeva, the chief executive of the MIA, said lower beef returns reflected difficult economic conditions, particularly in North Asia, and competition from other global suppliers.

It was a tough year for exporters.

“Red meat exports are a good barometer of the state of the global economy.

“The drop 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.

“Increased supply from other exporters, including a significant increase in Australian sheepmeat exports, also had an impact.”

Significant falls in red meat exports were recorded in Japan, down 31% to $388 million, United Kingdom 22% to $361m and the Netherlands, 4% to $347m.

Karapeeva attributed the drop in sheepmeat value to cost-of-living pressures facing consumers but also increased competition from Australian lamb following three years of excellent growing conditions and flock rebuilding.

Australian sheepmeat exports in 2023 increased 25% but by 50% to China alone, with its sheepmeat tariff dropping to zero at the beginning of 2023.

Last year China bought 216,079t of NZ sheepmeat, 56% of our exports, which was 10% higher by the volume but 10% less in value at $1.4bn.

The UK was NZ’s second largest market for sheepmeat, but inflation and competition from Australia following activation of its free trade agreement with the UK contributed to a 7% decline in volume and 29% drop in value for the year.

The United States, our third largest sheepmeat market by volume, bought 27,567t, down 5%, but worth $544m, down 8%.

Beef exports to the US recovered during the year after a spike in domestic production due to drought in 2022 flooded the market.

NZ beef exports to the market grew 46% to 181,040t and increased 28% by value to $1.6bn.

Volumes to Canada grew 77% to 18,110t with value 52% higher at $155m.

China remained our largest beef market by volume at 203,509t, down 6%. However, the weak economy, high inventory levels and large volumes of Brazilian exports saw the value drop 26% to $1.56bn.

Exports to other major North Asian markets all declined, largely due to inflation and cost-of-living pressures.

The NZ-UK beef free trade agreement came into force mid-year, giving NZ significantly improved quota access, with the market taking 2421t worth $27m, mostly high value chilled beef .

Fifth quarter exports for the year were worth $2bn, down 8% from 2022.

Casings and tripe remained the largest fifth quarter category, with exports of $383m, down 13%, with China the largest market at $281m followed by Italy at $18m and Korea $14m.

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