New Zealand Shows Resilience Amidst a Turbulent Red Meat Export Season

Published 2020년 11월 11일

The red meat export market experienced a turbulent season due to the volatility that was brought about by the outbreak of COVID-19. New Zealand processors and exporters tactfully adapted to these changes by employing various strategies that led to a successful export season.

Performance of Red Meat exports in 2020

The marketing year ending September 2020 capped off a very successful year for New Zealand farmers, processors and exporters in the red meat Sector, with exports increasing by 8% to USD 9.39 billion compared to the previous marketing year. Amongst the top 10 import markets in the world, the Netherlands had the largest decrease in imports, 14% less than the previous year. The third quarter, in particular, proved to be a highly successful period, with exports reaching a value of USD1.69 billion, a similar outcome to that of 2019, an impressive figure given the volatility of 2020. New Zealand processors and exporters demonstrated a thorough understanding of supply chains and adaptability by forging pathways into less serviced export markets as a means to soften the impact of COVID-19. The 2019/2020 season was further aided by favourable global red meat prices along with desirable exchange rates against the US dollar and Japanese Yen, which helped boost export values to the US and Japan.

The US became New Zealand's top export destination for red meat in the 3rd quarter, with exports reaching USD 400 million, a 50% increase compared to the previous year. The 3rd quarter also saw a 40% growth in the UK market (USD 71M) and a 25% increase in Germany (USD 70M). The Chinese market, however, did not offer the same fortunes, with exports declining by 25% during this quarter.

Top 10 overall red meat and co-product markets by value, 2019/20

Source: Meat Industry Association (MIA)

Strategies employed to adapt to market challenges

The economic and social impact of the pandemic has adversely affected the food service sector, resulting in increased importance of the retail and e-commerce sector. This has led New Zealand exporters and processors to shift their focus from chilled meat to frozen products. This period also saw increased volatility in the Chinese market, compelling exporters to forge pathways in alternative markets such as the UK, the US and Taiwan for sheep meat, and the U.S, Taiwan and Canada for beef, thereby leaving overall export volumes unchanged. The 2019/20 export season saw the value of sheep meat exports increase by 4% to USD 4 billion with beef exports reaching USD 3.8 billion, a 15% increase compared to the previous season.

Source: Meat Industry Association (MIA)

Continued resilience expected in the 2020/21 season

The forecast for the red meat sector in New Zealand shows that stakeholders in the sector are erring on the side of caution as volatility in the market is expected due to the impact of the last drought in the country, the extreme dry conditions that are expected in the coming months and the potential disruptions to shipping lines from Europe. Further turbulence is also expected in the global market as the impact of COVID-19 continues to be felt in key red meat markets, with the UK and several Europe countries commencing a second round of lockdowns.

Despite this, experts have forecasted that the demand for red meat in China is set to increase as the country prepares for Chinese New Year Celebrations in the coming year. The red meat processing and exporting sector held this marketing year despite other sectors struggling due to the effects of COVID-19, and this has left stakeholders optimistic that this resilience will continue in the coming year.