Beef+Lamb NZ’s trade team gave farmers a running brief of the state of export trade and market access at the Central South Island Farmer Council’s annual meeting in Geraldine.
UK and Europe regional manager Alex Gowen said it was almost getting to the stage where the personal finances of UK and European people were getting stretched.
He said the high price for red-meat cuts was starting to be less competitive as consumers started to switch from high value products.
Customer inventories were quite high as a result, he said.
"What we will probably see towards Christmas is a softening in the market and a softening in those prices. Who knows what will happen after Christmas? It’s all quite short term in terms of the market outlook at the moment. But we do tend to see a little bit of firming up around Christmas."
Exporters are looking at beef opportunities in the UK and Europe and this will depend on where the Irish, Australian and South American prices sit.
Since Brexit the UK was going through agricultural reform. UK had become a "four-headed beast" as reforms moved from direct subsidies in a seven-year transition.
Ag-inflation was sitting at 30% and farmers were reducing fertiliser application rates because of its availability and high price. That meant yields would go down and all of this was fuelling a food security debate, he said.
New Zealand was sharing the same concerns with inflation, sustainability, fuel and energy costs as the UK and Europe as well as the availability and cost of fertiliser and feed.
Mr Gowen said there was initially some anti-New Zealand feeling after UK and Europe trade talks were signed, but their main concerns now were that they might set a precedent with future trading agreements. They did not have a gripe now with NZ beef, while concerns that NZ lamb would flood markets had been cleared up.
Strong market prices had been the saving grace, he said.
Severe droughts had put pressure on Europe over the past year and forage supplies were tight.
Mr Gowen said some destocking was occurring because of feed availability and there would be forage restraints into the northern winter.
New Zealand exports 90% of its beef, 95% of its lamb and 98% of its mutton with more than 90% of trade under a free trade agreement or preferential trading arrangement.
International trade senior manager Frances Duigan said the team’s brief was to improve, maintain and protect market access and unlock new potential.
She said there had been 53% decrease in tarrif spending since 2010, and this was likely to continue with Japan and South Korea expected to have a larger slice of our beef as a result of FTA arrangements.
But there was more work to do with no trading arrangements in the Middle East, Africa or India, she said.
"These are huge countries where consumption is increasing and will continue to increase where we don’t have a foot in the door at the moment. Those are long, long-term gains and they’re not easy markets to get into, but those are the next steps on the pathway we are doing."
Trade talks were being re-energised in the Gulf Corporation Council (Saudi, UAE and Qatar) and hopefully traction would be made there, and there had been more conversations with India than for a long time.
She said countries often defaulted to self sufficiency by keeping goods instead of exporting them in times of global financial crises and the start of Covid. Most of time that resulted in chain reactions in trade.
A move to make sure that imports met sustainability criteria in the US, UK and Europe were sometimes legitimate and sometimes a guise for protectionism, she said.
TIM.CRONSHAW@alliedpress.co.nz
