US demand for red meat helps offset weak Chinese market

New Zealand exported red meat products worth $932 million during February, with demand from the United States helping to offset the weak Chinese market.

Overall, red meat exports in February were up 10 per cent on the relatively low export value recorded in February 2023, largely due to a rise in sheepmeat and beef exports, particularly to the United States.

Sheepmeat exports increased to nearly all major markets, apart from China where the volume fell by eight per cent to 19,401 tonnes.

Beef exports increased by 20 per cent overall to 48,431 tonnes. This was 15 per cent above the average for February exports over the last five years and included a four per cent increase to China.

The EU and UK markets saw an increase in both volume and value for beef. So far this year, New Zealand has exported 998 tonnes of beef to the EU, worth $19.8m, a 38 per cent increase in volume and 16 per cent increase in value compared to the first two months of last year.

The average free on board (FoB) value of beef exports to the EU is $19.83/kg, more than twice the $8.31/kg average for beef exports.

Meat Industry Association chief executive Sirma Karapeeva said increased export volumes to the US were helping to offset lower demand from China.

“In February, the US accounted for nearly the same proportion of overall exports as China – 28 per cent and 30 per cent respectively.

“However, the results from the high value EU market highlights how the limited quota for beef in the Free Trade Agreement is a real missed opportunity for companies to develop a valuable market to help boost economic returns for the sector and the country.”

Sheepmeat

Sheepmeat exports totalled 41,850 tonnes. This was an 18 per cent increase on the low volume exported last February but was still below the average for February exports for the previous five years.

The value of sheepmeat exports increased by nine per cent, with an increase in the value of exports to most markets. China was the exception with the value of exports dropping by 24 per cent to $101 million.

Volumes to the US increased by 74 per cent to 4,262 tonnes with value up 54 per cent to $68 million, a record monthly volume and near-record value.

While the per kilogram value of exports has dropped from the high levels of last year, it demonstrates that there is still strong demand for sheepmeat in the US, even if cost-of-living pressures mean that consumers may be switching to more affordable cuts.

Sheepmeat to the UK increased 41 per cent by volume to 3,316 tonnes and 35 per cent by value to $30m compared to 2023 but this was still only half the $59 million achieved in February 2022.

Beef

Beef exports increased by volume and value to most major markets. Exports to the US rose 43 per cent to 18,849 tonnes, just ahead of China at 18,649 tonnes.

Value also increased by 20 per cent to $406m. The US led the way with exports up 55 per cent to $162m, and exports to Japan were up 34 per cent to $26m. Despite the small increase in the volume of beef exports to China, the value dropped three per cent to $137m.

Exports to the UK rose 336 per cent by volume from the low pre-FTA February 2023 results to 408 tonnes, and 598 per cent by value to $6 million, making it the eighth largest beef market.

The Korean market was an exception with beef exports down 20 per cent by volume to 1,280 tonnes and 19 per cent by value to $10 million.

Fifth quarter

The value of fifth quarter exports dropped eight per cent from last February to $166m.

Exports of edible offal rose by 23 per cent to $32 million and hides and skins by 40 per cent to $26 million.

However, this was offset by decreases in exports of casings and tripe, which fell by nine per cent to $30 million, tallow, which was down 48 per cent to $21m, and blood products, which were down 30 per cent to $19 million.