Saturday, March 2, 2024

Chilled meat stays on to-do list

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New Zealand’s market commitment and supply of beef and lamb to China is highly regarded there but that does not mean an early expansion to the access for chilled products.
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There are encouraging murmurings through the trade but no specific progress, Meat Industry Association chairman John Loughlin said after leading a working trip of industry leaders to China.

NZ already benefits from the big increase in demand and prices for mostly frozen sheep meat and beef and all the signs are there will be increasing consumption of both meat proteins in the years ahead. 

The beef forecast is demand will lift faster than world supply increases over the next 20 years.

Loughlin said the industry is getting good access to regulators and Government decision-makers in China and had a couple of really good meetings. The delegation made the point the limited number of sites permitted to export chilled product means there is also a limited range of what can be supplied.

“China has noticed and views favourably both how we have been able to step-up exports when they’ve had a desperate need for proteins after the African swine fever outbreak hit their pork supply and also how we have done the hard yards in terms of going there time after time to put our case.”

However, China moves at its own speed and administrators are conservative and risk-averse.

The Government is concentrated on social outcomes more so than the free-market principles by which the NZ meat companies operate.

“We put a premium on our companies’ open access and a level playing field but that is not a major concern for them and we need to recognise that.”    

Only 10 NZ processing plants, owned by just six meat companies – the big four plus Greenlea and Ovation – are licensed for chilled lamb and beef exports to China. That was two years ago and the industry has been waiting for the list to be expanded.

“It’s frustrating for us as supporters of free trade that some of our people can’t be part of that market,” Loughlin said.

“Some chilled product is going there so it has to be an advantage for the companies involved.”

However, chilled access is still viewed as more about medium-term positioning rather than a huge and immediate dollar prize.

The reality is the great strength of the frozen supply market is compressing the theoretical margins achievable for chilled product.

Loughlin said he is always an optimist and, as such, always hoping for tangible progress next year.

“We don’t have a place there as of right so there will be a lot of tripping back and forth and a lot of hard work to keep what he have as well as trying to gain new access.”

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