Sunday, July 3, 2022

Mighty buyer

Demand for New Zealand beef in the huge Chinese market is increasing quickly, according to Beef + Lamb New Zealand market manager Siu-Lin Shim. From the third quarter of 2012 onwards exports of beef to China have rocketed. In both December and January NZ meat companies shipped nearly 3000 tonnes monthly, in contrast to monthly totals of 100-200 tonnes previously. In those two months China was NZ’s second-largest beef market, overtaking Taiwan, South Korea and Japan, but behind the average of 15,000 tonnes shipped to the United States each month.

For the 2011-12 meat export year sales of beef to China were 6175 tonnes – in the first four months of the present meat export year (October to January), sales were 7750 tonnes.

Siu-Lin was speaking at Paua Station, owned by Parengarenga Incorporation, near Cape Reinga in the Far North, on her last day of a seven-day NZ familiarisation visit. She was due back at Kaitaia airport late afternoon before flying out of Auckland that evening back to Beijing.

She said the two main characteristics of the surge in NZ beef imports were the unfilled demand from the growing Chinese middle class and the switch in product types towards higher value cuts.

China’s beef consumption has traditionally been 95% locally produced, from tens of millions of cattle owned by the rural poor in small numbers.

The remaining 5% has come mainly from the US and is grain-fed. The imported product goes into hotel and restaurant meals.

Since the BSE scare in 2003 and recently the ractopamine scare of 2012, Australian grain-fed had largely replaced the US supplies, Siu-Lin said.

In animals, ractopamine revs up production of lean meat, reducing fat. It is widely used by pig producers in the US.

On location: Beef + Lamb New Zealand China markets manager Siu-Lin Shim and her colleague Helen Fletcher, manager of Asia markets, at Paua Station’s field day in the Far North.

As well the domestic production of beef in China is falling as the Government favours more production of pork.

Beef consumption in China is under 5kg a person annually, and the potential to increase this consumption is huge as more people have more disposable income to spend on western foods.

There are 1700 McDonald’s restaurants in China with plans to boost the number to over 2000 stores this year. Many other fast food chains are also well-established and expanding store numbers.

Over the next five years it has been estimated that beef consumption will grow by 20% to 30% and with the domestic production falling, most of that increase in consumption must come from imported supplies.

New Zealand is extremely well-placed with the free trade agreement that will eliminate beef tariffs by 2016. It is presently 5%, but that did not mean our beef was 5% more competitive than beef from other countries, Siu-Lin said.

The final price of any imported product contains a large number of factors that go into price as well as tariff level, such as shipping costs, volume and comparative quality.

In the past China has imported low-value beef cuts from NZ but in the recent surge of imports has turned to higher value cuts such as cube rolls and strip loins.

The surge has come at a good time for NZ exporters, because South Korea, which was the second-largest market, has trimmed its purchasing from 3000-plus tonnes a month (five-year average) to 2000-plus tonnes.

The Beef + Lamb NZ message to China is very much centred on the attributes of grass-fed beef – low fat, naturalness, free range, excellent food safety and traceability.

The marketers educate importers, executive chefs, high-end retailers and marketing staff members with presentations on NZ farming systems and beef classification, with celebrity chef demonstrations and sampling.

“They respond well to grass-fed beef once they try it,” Siu-Lin said.

“New Zealand already has a reputation for quality so these Chinese meat importers are willing to pay for better quality.

“All of the work we do in the market is done closely with the meat companies.”

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