Wednesday, December 6, 2023

Chilled meat moves start

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A small technical delegation from the meat industry is going to China at the end of the month hoping to start a move to extend chilled red meat exports.
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It will be followed in November by a larger group of senior industry leaders, Meat Industry Association trade and economic manager Sirma Karapeeva said.

Ten processing plants owned by six meat companies, the big four of Alliance, Silver Fern Farmers, Anzco and Affco plus Greenlea and Ovation, were licensed two years ago for chilled lamb and beef exports to China and the trade is operating well but further development has stalled.

The objective is to get all processors licensed.

There has been a level of frustration at delays in getting market access issues resolved but the system is the system, she said.

In the meantime, Chinese demand for New Zealand red meat has boomed and pushed prices to new levels but most of it is frozen product.

In March last year there was a major restructuring in China, in which the organisations the NZ industry worked with were disestablished and replaced by new bodies. 

“The new system has settled down and that is part of the reason for these visits.”

Karapeeva will lead the technical delegation, taking three experts from meat companies to a seminar in China focusing on standards and cold-chain infrastructure. The Chinese are very keen to learn from NZ’s expertise.

Developing a top-quality cold-chain system in China is a must for chilled exports.

Anzco sales and marketing general manager Rick Walker said beef is more robust and can handle the existing supply chain set-up better but chilled lamb is a real challenge. Anzco is licensed for both but is taking a slow-burn approach, especially for chilled lamb until full integrity of the supply chain across the multiple parties involved can be assured. 

“Lamb will be  very small for us until we have that.” 

Facilities are better in tier-one cities such as Shanghai and Beijing and Anzco also has beef customers outside tier one.

Karapeeva and Walker said the Chinese demand for frozen exports does not mean the industry has taken its eye off the opportunities for chilled sales in other markets. All companies are mindful of being over-exposed to one fast-growing market that can also be volatile.

Anzco’s focus has been on chilled lamb and volumes to other markets have not necessarily changed, Walker said.

But the Chinese volume and price boom has put pressure on other markets. 

“It gives us the option of saying to customers that if we can’t get the right price for chilled lamb in those markets then it can go frozen to China.”

So far that has not happened and is not expected to happen because retailers need a consistent supply for their consumers so are prepared to pay up. 

“But it is a lever for us.”

North America, Britain and Germany are key chilled lamb markets for Anzco.

It hopes to have Christmas chilled prices agreed on with British customers in the next couple of weeks. There is no great concern among customers over access to the supply chain from Brexit uncertainty.

Germany is a strong customer for chilled lamb from Christmas to Easter.

GlobalHQ analyst Mel Croad said Chinese demand for frozen lamb is an easy-sell but more plants need to be licensed for chilled sales to allow NZ to fully capitalise on China’s increasing wealth, especially if the industry is reducing its reliance on the Christmas chilled markets in Britain and Europe.

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