Meat exports prove resilient
The meat industry is ‘‘watching with great interest’’ to see if warnings of meat shortages in the United States have a positive effect for our export beef industry.
In the US, meat plants closed because of Covid-19 have raised fears that consumers could see meat shortages in a matter of days.
Tyson Foods Inc, one of the world’s largest food companies, ran a full-page advertisement in The New York Times and other papers last week warning that millions of pounds of pork, beef and chicken would disappear from the supply chain.
Here in New Zealand, meat plants were able to operate as essential businesses. And despite initial difficulties getting their exports distributed in China during its lockdown, the meat is getting through. The Meat Industry Association’s latest results are proof.
In March beef exports rose three per cent in volume and 14 per cent in value on last March.
Sheepmeat exports also rose 4 per cent in volume and 13 per cent in value compared to a year ago. And overall, New Zealand’s total red meat exports earned $1.1 billion, a 12 per cent boost from March last year.
So good was demand, in fact, that March was the first month ever when total red meat exports topped the billion dollar mark.
Sirma Karapeeva, chief executive of the Meat Industry Association, said it was testimony to the industry’s ability to pivot between markets, its good global networks and the hard work of meat processors under very challenging conditions.
Operators had worked public holidays and put on extra shifts to pick up the pace as companies tried ‘‘to keep that very fine balance between keeping the processing side working and keeping your workers safe’’.
‘‘We saw some drops, for example in sheepmeat processing capacity, it went down by 50 per cent and for beef, it went down 30 to 40 per cent. That had a lot of flow-on implications.’’
The US vies with China as New Zealand’s biggest beef market, using our leaner grass-fed beef with fattier grain-fed beef for hamburgers, which Americans can still go out and buy.
It takes much less of our sheepmeat, and Karapeeva said restaurants were largely shut which had stopped demand for New Zealand lamb, particularly lamb racks.
However, exporters were being ‘‘nimble’’ and redirecting sheepmeat bound for US restaurants into the supermarket and retail markets. Demand from Malaysia had also helped offset the fall.
If meat shortages did appear in the
US, Karapeeva said it could potentially benefit New Zealand, although the US also sourced beef from closer countries.
In China, New Zealand’s biggest sheepmeat market, meat exports were down 9 per cent on a year ago but recovering well from China’s descent into lockdown. Both beef and sheepmeat exports to China dropped sharply in February but volumes have virtually doubled in March.
Globally, the signs were good for New Zealand meat, with no widespread decline in demand or the price falls seen in other commodities.
However, the industry is still very vulnerable to how well it keeps Covid19 out of its workforce.
Although President Donald Trump has ordered US meat works to stay open, AP has reported that an estimated 6500 unionised meat workers are sick or were exposed to the virus while working next to someone who tested positive. Twenty food processing and meat packing members had died.
Here, new distancing protocols have slowed processing down, but the workforce has been largely untouched. One worker at Alliance’s Timaru plant tested positive last month, and 14 workers took a test and were off work while they waited for results.
Karapeeva said the industry had moved ‘‘very quickly’’ to put new social distancing measures in place, but this had lowered production, with knock-on implications for droughtaffected farmers.
‘‘Our companies have been really focussed on compliance with those protocols but at the same time, how to safely increase capacity to manage some of those pinch points for the farming community, because of course, with drought and the lack of feed and the like, there’s a need to continue processing and continue taking the stock.’’
She said the crisis served to highlight two important things. ‘‘The red meat sector is proving how important it is to the New Zealand economy and being the largest manufacturing industry, we are generating critical export revenue and jobs, particularly in the regions.
‘‘The other thing that has been highlighted to me is the resilience of the sector, and despite the notion that we might be over-reliant on one or two markets, in fact, some exporters have got very diverse market strategies and are able to pivot and repurpose product very quickly to keep operating.’’
Annually beef volumes were up four per cent to 465,208 tonnes, with China taking more than half of it at 208,881 tonnes and Japan 8 per cent or 20,458 tonnes. Value-wise beef exports was also booming, earning $3.8 billion, 18 per cent more than the last year to March.