Analyst Intel

20 September 2019

ACROSS THE RAILS | Oh, to be in such demand

ByMel CroadMel Croad

New Zealand lamb and beef exports are front-footing it on the global stage with red meat-producing powerhouses earning favourable respect and returns.

The country’s export footprint might pale in comparison with some of the big guns but by no means is that a limitation. NZ beef exports will come in about 480,000 tonnes this season compared to the likes of Brazil at 1.5 million tonnes, Australia 1.13m tonnes and the United States 1m tonnes. For lamb, export accolades swing in our favour, being the largest exporter of lamb globally. Australia is closing the gap but its exports will now be hamstrung for a few seasons until it can rebuild its flock.

Demand for NZ lamb and beef has soared this year as key markets grapple with supply shortages. Demand from China has been unwavering and while it might feel like we are redirecting all our lamb and beef into that market our exports are still filtering into other markets. Some of our traditional markets are noting reduced availability of product from our shores but China’s market share, on a volume basis, has lifted to only 40-42% of our total beef and lamb exports this season. While this is a notable jump on previous seasons it has, in many cases, caused other markets to stump up with higher prices to secure a portion of our quality offerings.

As a result, average export values for lamb and beef have soared into uncharted territory. This has enabled farmgate prices to lift to historical, if not record levels. And this is something farmers should be proud off – we are doing a mighty fine job of producing some of the highest-quality red meat the world demands and that is not going to change any time soon. If anything, we will see further commitment from our farmers to fine tune the quality of the lamb and beef they produce. This will go a long way to differentiate and future proof our stance on the global market – as leaders in producing premium red meat products that consumers are increasingly demanding.