Meat & Livestock News

Challenges in New Zealand’s Sheep Meat Exports to China

TL;DR: New Zealand’s sheep meat prices are unlikely to rise soon in China due to ongoing economic challenges. Beef + Lamb NZ is diversifying markets and exploring direct consumer sales to mitigate impacts, with global efforts aimed at reducing dependency on the Chinese market.

New Zealand’s sheep meat prices are unlikely to rise soon in China, a critical export market.

Persistent Economic Challenges

Alliance Group, the world’s leading processor and exporter of sheepmeat, reported ongoing economic difficulties in China. These issues are expected to keep market returns low in the short to medium term. “The economic outlook in China remains weak, which means weaker market returns are likely for now,” stated Kate Acland, Chair of Beef + Lamb New Zealand (B+LNZ).

Strategic Response

Despite these challenges, B+LNZ is actively seeking ways to reduce dependence on the Chinese market by exploring other markets. “We are striving to mitigate our exposure wherever possible,” Acland noted. The firm acknowledges that while China continues to influence global pricing significantly, there are strategies in place to diversify.

Looking Forward

B+LNZ plans to shift from China’s wholesale market to more direct consumer channels such as online retail and food services. This move aims to offer more stability and potentially higher returns. “In the medium to longer term, we see opportunities to move away from China’s wholesale market,” Acland added.

Global Market Dynamics

While the Chinese economy faces pressure, affecting consumer confidence and demand, B+LNZ points to positive signs elsewhere. The North American market is showing increased demand for lamb in retail and food service sectors due to its improving economy. However, increased production from Australia may limit potential gains.

Steady Demand Elsewhere

The EU market remains stable, with positive consumer engagement over Easter. The UK market also shows steady demand. Meanwhile, the Middle East offers a volume alternative for commodity products, although challenges persist during the slow Ramadan period.

Balancing Global Supply and Demand

On the mutton front, global supply and demand are balancing, primarily due to reduced supply from New Zealand. “However, increased supply from Australia is keeping prices in check,” B+LNZ reported.

Wider Market Efforts

In response to the challenges in China, B+LNZ is broadening its focus to include markets in Taiwan, Malaysia, and Singapore. The EU, UK, and North America continue to be seen as viable markets for certain cuts of meat.

Broader Industry Impact

The issue is not limited to sheepmeat, as beef prices in China are also under pressure, affecting pricing across various items. B+LNZ is committed to working with sector partners to ensure these changes are beneficial and lasting for both farmers and the environment.