Meat exports have been hit hard by slackening demand from China. Photo / NZME
Meat exports have been hit hard by slackening demand from China. Photo / NZME
China’s slow post-Covid rebound is weighing on New Zealand’s red meat exports.
Meat Industry Association (MIA) data showed red meat exports dropped 24 per cent in July to $807 million, compared with the same month last year.
In the year-ago month, red meat exports of $1.1 billion were at arecord due to a catch-up in processing after Covid-related disruptions.
Meat is New Zealand’s second-biggest export after dairy.
MIA chief executive Sirma Karapeeva said red meat exports for July were in line with previous July exports from 2016-2021, but she said sheepmeat markets were under significant pressure.
“This big drop is a short-term impact from the very high export volumes last July, which were largely a result of Covid-related disruptions in the first quarter,” she said.
“That resulted in a 33 per cent increase in sheepmeat exports compared to July 2021 and was the largest July export volume since 2008.
“However, while this July’s drop in sheepmeat was largely due to short-term factors, overall we are also seeing a long-term trend for a reduction in the volume of sheepmeat exports and an increase in beef exports,” Karapeeva said.
“This is due to the decline in the sheep flock and the increase in cattle numbers — for both beef and dairy,” she said.
Productivity gains in the sheep sector had meant the drop in sheepmeat exports had not been as significant as the increase in beef exports, she said.
China remained the largest market for the month but saw the largest drop in overall exports for both beef and sheepmeat, down 45 per cent to $247m.
Exports to the US were up 25 per cent from last July, to $231m, with beef in particular recovering from very low 2022 levels.
Meat Industry Association chief executive Sirma Karapeeva.
Canada was the third-largest market for the month, with a significant surge in exports, up 98 per cent from last July to $35m — driven by record beef exports.
Total beef exports increased 8 per cent by volume compared with last July, to 46,242 tonnes, but dropped 13 per cent by value to $405m.
The US was the largest beef market for the month, taking 18,154 tonnes worth $161m.
This was an increase of 115 per cent by volume and 81 per cent by value from the very low level of exports last July.
Beef exports to China declined, down 29 per cent by volume to 16,241 tonnes and 48 per cent by value to $124m compared with last July.
“While this drop can be partly attributed to the high level of exports last July, exports were still lower than other recent July figures for China,” MIA said.
Alliance Group’s Shane Kingston told the Herald last month after returning from a trade mission to China that conditions in the PRC were difficult.
“I think everybody at the moment is finding it challenging in China,” said Kingston, the co-op’s general manager of sales.
“There is no question that the speed of the recovery, post Covid, is not what anybody expected.
“There are a number of real challenges in the marketplace and it is playing out in terms of how the consumer is subsequently behaving in the categories such as ours,” Kingston said.
Alliance is New Zealand’s biggest sheep meat exporter.
Slackening demand from China has weighed heavily on New Zealand’s other main exports.
Dairy giant Fonterra has cut its farmgate milk price forecast to a mid-point of $6.75/kg of milk solids from $8/kg earlier in the year — below break-even for many farmers.
Export log prices have also fallen sharply.
Weakness in key commodities prices, along with a strong US dollar, has put downward pressure on the New Zealand dollar, which last traded at US59.05¢ from US63.70¢ in mid-July.
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
