Friday, March 29, 2024

Meat exports hit record highs

Neal Wallace
Export lamb and beef prices reached their highest-ever levels in the September quarter while forestry products, mainly logs, had their biggest decline in more than 10 years.
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Data released by Statistics New Zealand show export prices overall rose 1.9% in the quarter, to their highest level in over 10 years while import prices remained flat.

Meat prices rose 4.8%, driven by higher prices for lamb, up 6%, and beef, up 5.4%, because of demand from China seeking other proteins to replace the decline in pork as pigs are culled to control an outbreak of African swine fever.

Demand for alternative protein by China is expected to continue into next year, Rabobank’s latest beef outllook says.

Stats NZ figures show seasonally adjusted volumes of NZ meat exports for the September quarter were up 1.4% and values were up 8%. Lamb volumes fell 0.7% and values rose 7.9%. Beef volumes rose 2.9% and values were up 7.4%.

Prices for dairy products rose 8.9% in the quarter with milk powder up 9.6%, butter up 7.3% and cheese up 6.2%.

In contrast, forest product prices fell 9.7% following a 1.9% fall the previous quarter. Forestry product volumes fell 5.5% and values fell 12%.

The overall terms of trade for the quarter remained high at levels close to peaks seen in late 2017 when export prices for dairy and meat were also high.

Rabobank warns growing demand from China comes as global beef production is slowing, which could disrupt markets.

The bank’s senior protein analyst Angus Gidley-Baird says United States import beef prices are likely to reach record levels last seen in 2014 so some buyers are seeking alternative domestic supplies, which is putting pressure on US prices.

To try to meet demand China has licensed 22 extra beef processing plants in Brazil, eight in Argentina, an unknown number in Europe while South Africa’s export licence has been restored.

AgriHQ analyst Reece Brick said the traditional October chilled premium of 30c to 80c/kg for lamb is absent this year though with an average export price of $11.56/kg it is not a hardship.

That reflects weak European demand for chilled Christmas lamb, which has seen just 19% of October lamb exports sold chilled compared to the usual 27% to 36%.

Frozen markets and procurement competition have underpinned schedules.

“Where the problem lay was with sales into the United Kingdom and the Middle East, down 34% to 36%.

“Only France stepped up to fill some of the void, likely playing it safe on the chance that Brexit cut off their pipeline of UK-sourced lamb.”

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