“For many companies, the year was one of continuing to quietly strengthen their positions, improving efficiencies at home in production while pushing hard to deepen relationships and realise higher returns from overseas markets.”
In sheep meat, 92% of production is exported and 83% of beef goes to more than 120 countries.
The billion-dollar markets are China and the United States and the next level downwards, from $100 million to $1b, are Australia, Indonesia, Malaysia, Taiwan, Japan, the European Union, Britain and Canada.
The association welcomed the signing of the Comprehensive and Progressive Trans Pacific Partnership and has worked to establish good relations with the post-Brexit United Kingdom.
The beginning of free-trade agreement negotiations with the European Union and association visits to China were also highlights.
“But we face major uncertainties and a lot of the MIA’s work in the past year has been to either manage those uncertainties or else put ourselves in a better position to deal with them.”
The system of international trade rules is coming under pressure.
“Protectionist attitudes in the US have become more belligerent and where this goes is uncertain but the risks are real and potentially significant as other countries retaliate and escalate matters.
Uncertainties include Brexit and the plan to split New Zealand’s sheep and beef quotas between the two, which is totally unacceptable because it erodes NZ’s legally binding World Trade Organisation access rights.
The Government’s ambition to make NZ carbon neutral by 2050 is another concern.
The MIA sees putting agriculture into the Emissions Trading Scheme with a tax on animal processing as a blunt instrument putting the sector at risk.
“Such an approach will do absolutely nothing to reduce carbon emissions and will act as a tax on meat production – a tax which none of our heavily subsidised international competitors have to bear.”
Further risks come from the Government’s industrial relations agenda, potentially significantly worsening the tight labour constraints in the meat industry.
There is an estimated shortfall of 2000 workers and some product is not being processed to its highest value.
“A risk is that tightening labour markets combined with inflexible industrial relations may force the industry back into a commodity trap.
“A priority for the MIA with 2018-19 will be a strategy to resolve the labour shortage issue, including by advocating for a flexible, highly skilled future workforce.”
A solution needs several facets, including attracting more workers, countering false, popular stereotypes, enhanced training and skills development, continuing adoption of automation and immigration.
“It is disappointing that the Government’s industrial relations agenda … looks backwards rather than forwards.”
Loughlin and Ritchie said the Mycoplasma bovis response shows the urgent need to address biosecurity system shortcomings, especially farmer compliance.
The association and processors will play an active role in future biosecurity reforms, having signed a Government Industry Agreement in September 2017.
Processors pay nearly $40m a year to the Primary Industries Ministry for the meat assurance scheme, plus $47m to AsureQuality for regulatory tasks.
