TL;DR:
- New Zealand’s red meat exports increased in volume but saw an 11% decrease in returns in 2023, with a notable 16% drop in earnings from the Chinese market.
- Sheepmeat and beef exports rose by 3% and 7% in volume, respectively, yet faced declines in value due to global economic pressures and increased competition.
- The UK and North Asian markets experienced significant downturns in red meat imports from New Zealand, influenced by inflation, competition, and trade agreements.
In 2023, New Zealand’s red meat industry encountered a paradoxical situation where, despite an uptick in export volumes, financial returns diminished, reflecting the challenges posed by softening global markets.
According to the Meat Industry Association, the combined returns from sheepmeat and beef exports totalled $10.2 billion, marking an 11% decline from the previous year. This downturn was particularly pronounced in the Chinese market, which experienced a 16% fall in returns to $3.6 billion.
Export Performance Breakdown:
- Sheepmeat exports from New Zealand increased by 3% in volume to 384,239 tonnes, yet the value dropped by 14% to $3.7 billion.
- Beef exports grew by 7% in volume to 511,680 tonnes, with the value decreasing by 9% to $4.4 billion.
- The United States showed an 8% increase in returns at $2.5 billion, buoyed by stronger demand for beef.
Sirma Karapeeva, Chief Executive of the Meat Industry Association, attributed the lower beef returns to challenging economic conditions in North Asia and stiff competition from global suppliers.
The year was marked by economic difficulties and inflationary pressures in key markets, impacting consumer spending on red meat. Additionally, increased supply from other exporters, notably Australia, intensified the competition, particularly in the sheepmeat sector.
Market-Specific Insights:
- China remained the largest market for New Zealand’s sheepmeat, purchasing 216,079 tonnes, which was 10% higher in volume but 10% lower in value at $1.4 billion.
- The UK and US markets also saw declines in both volume and value, with competition and economic pressures cited as key factors.
- Beef exports to the US recovered, growing 46% in volume and 28% in value, contrasting with declines in other major North Asian markets due to economic and inventory challenges.
The report also highlighted the impact of trade agreements and global economic conditions on export dynamics. Notably, the New Zealand-UK free trade agreement improved quota access for beef, leading to an increase in high-value chilled beef exports.
In summary, New Zealand’s red meat sector in 2023 navigated through a complex landscape of economic pressures, competitive challenges, and shifting market demands.
Despite the growth in export volumes, the industry faced significant headwinds that led to a decrease in overall returns, underscoring the need for strategic adaptation and market diversification.
