Meat industry holds own amid global disruptions

New Zealand’s red meat sector is continuing to achieve strong export results in the face of considerable labour shortages and global supply chain disruption, the Meat Industry Association says.

Latest MIA analysis shows the industry is overcoming significant headwinds, with exports reaching $940m during January, a 27 per cent increase by value on January 2021.

The value of exports increased to nearly all major markets. China was up 25 per cent to $398m, the US up 32 per cent to $195m, the UK up 9 per cent to $41m and Japan up 76 per cent to $40m.

“January was another very positive month for exports, which reflects the efforts across the sector to overcome the many challenges in processing and exporting,” chief executive Sirma Karapeeva said.

“The industry is a critical contributor to our economy and its exceptional effort is enabling the sector to continue to perform well for all New Zealanders.

“However, the pressures are ongoing. There is currently no end in sight to shipping delays and the Covid-19 outbreak is exacerbating existing staff shortages, further limiting the number of livestock that plants can process and impacting some of the industry’s value add product offerings.

“All these factors highlight how very important it is that we get the right policy settings in areas such as immigration to allow the industry to operate to its full potential.”

Beef exports were a standout performer during January, with volume up 7 per cent to 42,291 tonnes, and value up 51 per cent to $422m. The three main beef markets were China ($186m), the US ($129m), and Japan ($24m).

“The strong demand meant that the average freight on board (FoB) value for overall beef exports during January was up to a record $9.98/kg,” Karapeeva said.

“However, the high prices, while very welcome, are masking some of the pressure the industry is under, and despite the export receipts, we should not be taking this as an indication that everything is rosy.”

Sirma said January data also revealed a big drop in the volume of chilled exports year-on-year.

“That indicates that the supply chain disruptions are continuing to have an impact on chilled exports, with companies sending more exports as frozen because of the risks in the disrupted supply chain, including significantly longer transit times. That has an impact on value.”

The total 3061 tonnes of chilled exports was 41 per cent lower than last January, and there was a drop in chilled exports to the UK and all the major European markets.

The 452 tonnes of chilled sheepmeat exported to the UK was the lowest level during January in more than 20 years. It accounted for only 17 per cent of sheepmeat exports to the UK by volume, compared to the usual 40 to 50 per cent in January.