Meat Industry update
Presentation to NZ Cold Storage Association
82nd Annual Conference
Wellington
19 August 2014
Tim Ritchie
Chief Executive
Meat Industry Association of New Zealand
Representing New Zealand Meat Processors, Marketers and Exporters
Presentation outline
• About the MIA
• Meat industry overview
• Competitive challenges
• Industry response
Representing New Zealand Meat Processors, Marketers and Exporters
Meat Industry Association of New Zealand
A voluntary trade association representing beef and sheep
meat processors and exporters.
33 member companies (about 99% of all meat exports).
Members operate
some 60 processing
plants nationwide.
Representing New Zealand Meat Processors, Marketers and Exporters
Industry overview (1)
12,500 commercial sheep and beef farmers
25,000 people employed in processing sector
o New Zealand’s largest manufacturing employer
Export-focused and fortunes
driven by world prices
Representing New Zealand Meat Processors, Marketers and Exporters
Industry overview (2)
• Red meat and wool exports worth $7.3 billion in
2013/14
• NZ’s 2nd largest goods exporter - 14% of NZ’s total
merchandise exports
•
Exports 92% of sheepmeat and 83% of beef production
• Export to more than 120 countries
Representing New Zealand Meat Processors, Marketers and Exporters
More than 130 years of cold storage
(and exporting)
The New Zealand meat industry has been built on its ability to
ship perishable goods to the other side of the world.
The “Dunedin”, which
made the first
shipment of frozen
meat to Britain in
1882.
Representing New Zealand Meat Processors, Marketers and Exporters
Historical exports
New Zealand sheepmeat and beef exports in 1961 (by volume)
Sheepmeat
Beef
Source: Compiled by MIA
from Statistics NZ data
Representing New Zealand Meat Processors, Marketers and Exporters
Market diversity
New Zealand sheepmeat and beef exports, ye June 2014 (by volume)
Saudi Arabia
1%
Other
markets
18%
Taiwan
2%
Other
markets
12%
Hong Kong
1%
Malaysia
China
2%
Belgium
2%
40%
United
States
48%
Canada
4%
Canada
2%
Netherlands
3%
Indonesia
4%
France
3%
Taiwan
5%
Saudi Arabia
4%
Korea
6%
United States
5%
Germany
5%
Sheepmeat
United
Kingdom
16%
Japan
7%
Beef
China
10%
Source: Compiled by MIA
from Statistics NZ data
Representing New Zealand Meat Processors, Marketers and Exporters
Product diversity
The industry also
produces and exports
a wide range of coproducts
Co-product export
revenue
NZ$1.4 billion
New Zealand exports of red meat and co-products
(by value), year ended June 2014
MBM
2%
Prepared &
preserved
meat
2%
Tallow
2%
Edible offal
3%
Casings &
tripe
3%
Hides & skins
9%
Important in
maximising the value
from each carcass
Beef
34%
Sheepmeat
45%
Source: Compiled by MIA
from Statistics NZ data
Representing New Zealand Meat Processors, Marketers and Exporters
Product and market diversity
(where the bits of a lamb go)
To Middle East
To USA
To Europe/UK
To UK
Edible offals to UK/China/Saudi Arabia
To China
Co-products:
Pelts to China, MBM to USA, Tallow to China and Singapore, Casings to
China/Hong Kong
Representing New Zealand Meat Processors, Marketers and Exporters
Changing product mix
80%
60%
40%
20%
-1
2
20
11
-1
1
10
-1
0
20
09
-0
9
20
20
08
-0
8
07
-0
7
20
06
-0
6
20
20
05
-0
1
00
-9
6
20
95
-9
1
19
90
-8
6
19
85
-8
1
19
19
80
-7
6
75
-7
1
0%
19
Frozen carcasses
Frozen bone-in cuts
Frozen boneless cuts
Chilled cuts
100%
70
Now in the disassembly
business – exporting
value-added products
Export lamb product mix, 1970/71 – 2011/12
19
Customers have
changed from butcher
shop to multiple retailer
Representing New Zealand Meat Processors, Marketers and Exporters
Major destinations for NZ red meat &
co-products
For 2013/14,
with arrows
showing
markets
worth $50m+
Representing New Zealand Meat Processors, Marketers and Exporters
China
NZ Meat Industry Exports to China - Rolling 12 Month FOB Value - Combined Value
1,400,000,000
Beef
1,200,000,000
Source: Compiled by MIA from Statistics New
Zealand overseas merchandise trade data
Beef offals
Sheepmeat
1,000,000,000
Sheep offals
Value (NZD)
Tripe, runners and casings
800,000,000
Tallow
Hides and skins
600,000,000
MBM
400,000,000
200,000,000
0
12 Month period to
Representing New Zealand Meat Processors, Marketers and Exporters
China sheepmeat
Consumption
3 kg/per capita,
and rising
Chinese sheepmeat balance 2000-2014f
Imports - 6.4% of
demand
Major impact on
world market
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China beef
Representing New Zealand Meat Processors, Marketers and Exporters
China
Chinese retail meat prices (US$/kg)
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Many markets – Many standards
• Regulatory standards:
Domestic, China, EU, US,
Japan, etc.
• Commercial standards:
McDonalds, Walmart, Tesco,
Metro, Carrefour, etc.
• Other:
NGOs, religious authorities,
consumer groups.
•
•
•
•
•
•
•
•
Food safety
Animal welfare
Biosecurity
Worker welfare
Halal
Biotechnology
Climate change
Other environmental
Representing New Zealand Meat Processors, Marketers and Exporters
Halal exports
Halal-certified exports compared to red meat and offal exports
1,000,000
900,000
Volume (tonnes)
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Source: compiled by
MIA from Stats NZ,
NZMB and MIA data
2003
2004
2005
2006
2007
Total halal certified exports
2008
2009
2010
2011
2012
2013
Total exports of red meat and edible offals
Representing New Zealand Meat Processors, Marketers and Exporters
Competitive challenges
• International competition from other proteins
• Domestic competition for land use
• Competition from other red meat producers
• Getting products to markets
Representing New Zealand Meat Processors, Marketers and Exporters
Relative profitability
ANZ Commodity Price Index (Jan 1990=100)
250
200
150
100
50
Meat
Jul-14
Jul-13
Jul-12
Jul-11
Jul-10
Jul-09
Jul-08
Jul-07
Jul-06
Jul-05
Jul-04
Jul-03
Jul-02
Jul-01
Jul-00
Jul-99
Jul-98
Jul-97
Jul-96
Jul-95
Jul-94
Jul-93
Jul-92
Jul-91
Jul-90
0
Dairy
Representing New Zealand Meat Processors, Marketers and Exporters
Pastoral land use change
Representing New Zealand Meat Processors, Marketers and Exporters
Livestock numbers
75,000
5,000
55,000
Beef -15%
4,000
Sheep -45%
3,000
45,000
35,000
Source: Beef + Lamb New Zealand Economic Service
Statistics New Zealand
2012-13
2010-11
2008-09
2006-07
2004-05
2002-03
2000-01
1998-99
1996-97
1994-95
1992-93
2,000
1990-91
25,000
Cattle (000)
Dairy +85%
65,000
Sheep (000)
6,000
% change 1990 to 2012
Representing New Zealand Meat Processors, Marketers and Exporters
Other red meat producers
NZ and Australia the two major sheepmeat exporters
But NZ a much smaller player in the beef trade
NZ beef exports around 1/3 volume of the major exporters:
• Australia, United States, Brazil – and India
Representing New Zealand Meat Processors, Marketers and Exporters
Indian buffalo beef exports
Indian buffalo beef exports (calendar years)
1,600,000
1,400,000
Volume (tonnes)
1,200,000
1,000,000
800,000
600,000
400,000
200,000
Source Compiled by
MIA from GTIS data
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Representing New Zealand Meat Processors, Marketers and Exporters
Getting product to market
Distance to major
markets
NZ chilled sheepmeat exports by Region
(by volume and value for the year ending June 2014)
80%
-6%
+7%
70%
(Figures show % change from previous year)
A particular
challenge for high
value, time
sensitive chilled
products
60%
50%
40%
30%
20%
+3% +2%
10%
-16%
-2%
+13% +14%
+14%
+20%
+12% +6%
0%
European Union
North America
Middle East
North Asia
Non-EU Europe
Other
Source: Compiled by MIA from Statistics New
Zealand overseas merchandise trade data
Volume
Value
Representing New Zealand Meat Processors, Marketers and Exporters
Impact of slow steaming on red
meat industry
Days required
Normal steaming – 24 knots
Slow steaming – 18 knots on Asia to Europe leg
Super slow steaming – 14 knots on Asia to Europe leg
Representing New Zealand Meat Processors, Marketers and Exporters
On-farm productivity
1990-91 2012-13p
Ewe Lambing
%
100.4
123.2
Hogget Lambs
% of all lambs
-
4.9
Average Lamb
kg
14.35
18.00
+25%
Lamb Sold
kg/ewe
9.76
18.44
+89%
Wool Production kg/hd greasy
5.28
5.38
+2%
Average Steer
kg
297
311
+5%
Milksolids
kg/cow
260
340
+31%
+23%
Source: B+LNZ Economic Service, Statistics New Zealand
Representing New Zealand Meat Processors, Marketers and Exporters
70.0
400,000
60.0
350,000
300,000
50.0
250,000
40.0
200,000
30.0
150,000
20.0
100,000
10.0
Lamb exports (tonnes)
Total sheep numbers (millions)
On-farm productivity
50,000
0.0
0
Total sheep numbers (millions) (left axis)
Lamb exports (tonnes) (right axis)
Representing New Zealand Meat Processors, Marketers and Exporters
Processing productivity
improvement
•
•
•
In 1980 the volume of meat exported per
worker was 23 tonnes
in 2013 the volume was 43.2 tonnes of a
much more valuable and further
processed product: a productivity gain of
at least 88%.
a typical meat worker now processes 130
sheep a day, compared to 55 in the 1980s.
Representing New Zealand Meat Processors, Marketers and Exporters
Robotics - automation
An industry consortium is investing in robotics to automate the early
stages of sheep processing, with two systems recently commercialised.
An automated brisket cutting system
An automated system to remove the
viscera set
Representing New Zealand Meat Processors, Marketers and Exporters
Getting product to markets industry
Maintaining and improving access into
as many markets as possible:
• Industry works closely with
government on market access
Investment in R&D to extend shelf life
of chilled meat
Will mitigate impact of slow steaming,
reduce wastage and improve returns to
the industry
Food safety
Representing New Zealand Meat Processors, Marketers and Exporters
Representing New Zealand Meat Processors, Marketers and Exporters
Thank you
Representing New Zealand Meat Processors, Marketers and Exporters