African swine fever has resulted in a big surge in meat exports to China. Photo / Supplied
African swine fever has resulted in a big surge in meat exports to China. Photo / Supplied
The arrival of African swine fever (ASF) in China has given the New Zealand meat export sector a huge boost as the world's biggest pork producer and consumer tries to bring the disease under control through widespread culling, industry officials said.
The boost comes at a time of significant uncertaintyfor the New Zealand meat export sector concerning Britain's exit from the EU and trade access to Europe.
Bloomberg reported that while official estimates count 1 million culled hogs, slaughter data suggest 100 times more will be removed from China's 440 million-strong swine herd in 2019.
Beef and Lamb NZ chief executive Sam McIvor. Photo / Supplied
Beef and Lamb NZ chief executive Sam McIvor said the outbreak had given the New Zealand meat sector a huge boost, both in terms of value and volume.
From January to April, sheepmeat exports to the PRC shot up to 95,000 tonnes from 75,000 tonnes at the same time last year.
For beef, exports almost doubled to 67,000 tonnes from 36,000 tonnes over the same comparative periods.
In terms of value, beef receipts shot to $476m from January to April from $244m a year earlier.
"When China gets hungry, everybody pays attention," McIvor told the Herald.
"There has been a massive upturn," he said.
"We are seeing a real lift in demand for ingredients beef - used for the likes of hamburgers - into China and they are paying a significant premium over the US," he said.
"It's across every meat category and it's growing," said.
"We are going through a stage where there is quite a bit of uncertainty in the European and UK market because of Brexit, but basically a lot of the risks have been offset by the demand out of China," McIvor said.
NZ Meat Industry Association chief executive Tim Ritchie said the outbreak had significantly sped up what had already been strong demand for meat from China over the last six years.
"It's going to be the key driver of the world meat markets in the short term, and a year or two after that," he said.
China already looms large as a consumer of New Zealand meat but it could soon become its number one market for beef, supplanting the United States, he said.
Ritchie said the outbreak would lead to far-reaching reforms of China's meat industry, particularly as the country strives to be self sufficient in food production.
"The fact that [it has] developed into a major outbreak has boosted demand for all the other meats, sheepmeat, beef and poultry."
In pig meat, China accounts for 46 per cent of annual global production, which totals 119 million tonnes.
Rural lending specialist Rabobank expects the outbreak to underpin prices, which have remained strong in the first five months of 2019.
Rabobank believes beef prices will stay strong, supported by higher pig prices and increased beef consumption.
Pork prices will increase substantially in the second half of 2019 as a result of reduced pork supply following pig culling due to ASF, it said.
"Furthermore a shift in consumption away from pork by some consumers, as a result of concerns around ASF, will see a rise in demand for beef," the bank said in a sector review.
"We expect these conditions to prevail through 2019 and into 2020, continuing to support strong beef prices," it said.
