Meat exports: still strong, but heading for a fall

Current strong export returns for New Zealand red meat face pressure in the coming months due to labour shortages and supply chain disruption, says the Meat Industry Association.

Association chief executive Sirma Karapeeva said the industry exported products worth $1.1billion during February 2022, with increases in value to all major markets.

Current strong meat prices were compensating for a drop in the volume of exports, with sheepmeat volumes down 11% and beef down 7% compared to February 2021.

“Absenteeism in processing plants due to staff having to isolate during the Covid-19 pandemic is adding to the pressure on our industry, which is already dealing with a significant labour shortage and ongoing global logistics challenges.

“While the impact of labour shortages in the industry is not yet showing up in the headline export data, they are starting to affect exports of specific products.

“For example, while offal prices are still high, the volume of offal exported in February was down around 35% compared to February exports in the previous six years, indicating that there aren’t the staff available to process every part of the carcass and companies are not able to maximise the value of each carcass that is processed.

“The supply chain issues are reflected in the drop in volumes of chilled sheepmeat, with more exporters opting to send frozen product to markets. Chilled sheepmeat exports were down 18% compared to last February, with the largest drop to the UK, which was down 52%.

“This drop in chilled meat exports impacts our ability to capture greater market value from our products. Chilled meat is a sophisticated value-add product backed by sophisticated processing and innovation. However, the supply chain disruption means that we can’t extract the maximum value because frozen products often attract a lower price point.”

The overall value of exports to China increased by 4% to $406 million during February, the United States was up 34% to $238 million and the UK 28% to $66 million.

The value of sheepmeat exports was up by 13% to $475 million and beef by 34% to $460 million. Co-products continued to perform well, with exports worth $172 million, an increase of 16%.

Chilled beef exports held up better than sheepmeat as the volume exported lifted slightly, by 1%. There was a 10% drop in the volume of overall beef exports to China, to 17,938 tonnes, but February 2021 was a record month and the overall volumes for this year were still historically very high.

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