It has the potential to shift the price drivers in beef and cattle markets, starting in the United States and flowing on to New Zealand.
China is already NZ’s largest beef customer, taking 36% of export tonnage last year.
China, South Korea and Japan are increasingly competing with the US for beef trimmings, Holgate said.
Sales of beef by McDonald’s in Japan have increased by 39% over the past three years.
Many of the cuts imported by China have been to satisfy the local cuisine.
But as diets and food service change demand now includes a growing trend in trimmings trade, Holgate said.
“Part of this growth can be attributed to the growth in quick service retaurants.
“In 2018, McDonald’s opened more than 300 stores in China, taking their total store numbers to 2800.”
The chain plans to get to 4500 outlets in Hong Kong and China in 2022. Burger King reached 900 Chinese stores by the end of 2018.
While in the short term China is not likely to unseat the US as the world’s major buyer of manufacturing beef the increased competition will put upward pressure on global prices.
“NZ exporters have benefited from China’s emergence as a serious competitor to the US for manufacturing beef, redirecting supplies into China and forcing US buyers to increase their prices in order to secure supplies”.
In April the US import price for lean beef trimmings was US$2.20/lb (NZ$7.50/kg), 5% higher than the five-year average price for that time of the year, indicating the pressures of increased competition.
However, Holgate does not expect Asian countries to set the market prices but match them to secure supply.
A short-term demand for all proteins caused by African swine fever means beef trimmings are a likely substitute for pork.
NZ beef exports during the first half of the season, October to March, were up 6% in volume and 9% in value.
The average price received at $7486 a tonne is the highest since 2013-14.
