Saturday, March 30, 2024

Meat sector great spot to be in

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Silver  Fern Farms remains easily the biggest New Zealand beef processor and marketer though its share of the United States beef quota continues to slip from previous high levels.
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But it retains a more stable share of the beef quota than it does for the European Union sheep meat quota, where there has been a significant decline, though not enough to threaten the group’s status as the country’s biggest meat company.
Silver Fern has a 2018 calendar year beef quota of 63,653 tonnes, a 29.83% share, compared to 64,423t and 30.19% last year.
Chairman Rob Hewett said the figures partly reflect the pressure the group has been in over recent years but it would be naive to say it presented a full picture of its activities.
Silver Fern had put a lot of focus on its Reserve quality beef cuts and other added-value work into other markets, whereas the US market was predominantly for grinding beef for the hamburger market.
“The biggest market for our Reserve high-paying cuts is China and that’s all in the last four years. 
“The US is very important and even some beef from prime goes into the grinder market but we can create more value by putting different products into the wider marketplace.”
With the big capital boost from the investment by Shanghai Maling Silver Fern was in a position to be more competitive in securing livestock for processing “but we won’t be blowing our brains out on procurement. We’ll be creating more value and sharing that with suppliers who provide us with the right product.
“It won’t be supply at any cost,” Hewett said.
Silver Fern was happy with its processing portfolio and had set a company record sheep meat tally for December even though two of its sheep meat plants, Fairton and Frasertown, had been closed since the previous season. 
In the 2018 US beef quota, Affco Holdings displaced Anzco Foods as the number two exporter, though the gap remains narrow.
As with the EU sheep meat quota, among the major players, Affco has been the big mover in the beef quota since 2013. It has had an overall 12% lift in beef tonnage since then while Silver Fern, Anzco and Alliance have all dipped. 
Alliance, the biggest lamb exporter, slipped to fifth for beef exports a couple of years ago, overtaken by Waikato-based Greenlea Premier Meats, which now has a share 1000 tonnes greater than the southern co-operative. Greenlea’s share has gone to 9.11% from 8.95% year-on-year and Alliance has edged up to 8.64% from 8.59%. Greenlea is up 19% since 2013.
Affco has a 41,177t allocation this year, up from 40,553t, and its share has moved to 19.3% from 19%.
For Anzco the move is to 40,909t across its two trading entities, CMP and Riverlands, compared to 41,257t last year, a share of 19.18% from 19.34%.
The sixth biggest exporter of the 16 entities with allocations is Wilson Hellaby. Its allocation rose slightly year-on-year but is down 20% since 2013.
Hewett described the meat processing environment sector as a great spot for everyone in the current market, over all the species. 
“Farmers are getting good prices compared to historic levels and processors are making reasonable margins.”
Low inventory levels were positive for the pricing outlook.

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