representing new zealand meat processors, marketers and exporters meat industry update presentation...

Representing New Zealand Meat Processors, Marketers and ExportersRepresenting New Zealand Meat Processors, Marketers and Exporters

Meat Industry update

Presentation to NZ Cold Storage Association 82nd Annual Conference

Wellington19 August 2014

Tim RitchieChief 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


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.


Industry overview (1)

12,500 commercial sheep and beef farmers

25,000 people employed in processing sectoro New Zealand’s largest manufacturing employer

Export-focused and fortunes driven by world prices


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


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.


Historical exports

New Zealand sheepmeat and beef exports in 1961 (by volume)

Sheepmeat BeefSource: Compiled by MIA from Statistics NZ data


Market diversity

New Zealand sheepmeat and beef exports, ye June 2014 (by volume)

Sheepmeat BeefSource: Compiled by MIA from Statistics NZ data

United States48%

China10%

Japan7%

Korea6%

Taiwan5%

Indonesia4%

Canada4%

Malaysia2%

Hong Kong1%

Saudi Arabia1%

Other markets

12%

China40%

United Kingdom

16%

Germany5%

United States5%

Saudi Arabia4%

France3%

Netherlands3%

Canada2%

Belgium2%

Taiwan2%

Other markets

18%


Product diversity

The industry also produces and exports a wide range of co-products

Co-product export revenue NZ$1.4 billion

Important in maximising the value from each carcass

New Zealand exports of red meat and co-products(by value), year ended June 2014

Source: Compiled by MIA from Statistics NZ data

Sheepmeat45%

Beef34%

Hides & skins9%

Casings & tripe3%

Edible offal3%

MBM2%

Prepared & preserved

meat2%

Tallow2%


Product and market diversity(where the bits of a lamb go)

To Middle East To UK

To China

To USA To Europe/UK

Co-products:Pelts to China, MBM to USA, Tallow to China and Singapore, Casings to China/Hong Kong

Edible offals to UK/China/Saudi Arabia


Changing product mix

Customers have changed from butcher shop to multiple retailer

Now in the disassembly business – exporting value-added products

Export lamb product mix, 1970/71 – 2011/12

Frozen carcassesFrozen bone-in cutsFrozen boneless cutsChilled cuts

0%

20%

40%

60%

80%

100%

1970

-71

1975

-76

1980

-81

1985

-86

1990

-91

1995

-96

2000

-01

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12


Major destinations for NZ red meat & co-products

For 2013/14, with arrows showing markets worth $50m+


China

0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1,400,000,000

Va

lue

(N

ZD

)

12 Month period to

NZ Meat Industry Exports to China - Rolling 12 Month FOB Value - Combined Value

Beef

Beef offals

Sheepmeat

Sheep offals

Tripe, runners and casings

Tallow

Hides and skins

MBM

Source: Compiled by MIA from Statistics New Zealand overseas merchandise trade data


China sheepmeat

Consumption

3 kg/per capita, and rising

Imports - 6.4% of demand

Major impact on world market

Chinese sheepmeat balance 2000-2014f


China beef


China

Chinese retail meat prices (US$/kg)


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


Halal exports

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Vo

lum

e (

ton

ne

s)

Total halal certified exports Total exports of red meat and edible offals

Source: compiled by MIA from Stats NZ, NZMB and MIA data

Halal-certified exports compared to red meat and offal exports


Competitive challenges

• International competition from other proteins

• Domestic competition for land use

• Competition from other red meat producers

• Getting products to markets


Relative profitability

ANZ Commodity Price Index (Jan 1990=100)

0

50

100

150

200

250

Jul-

90

Jul-

91

Jul-

92

Jul-

93

Jul-

94

Jul-

95

Jul-

96

Jul-

97

Jul-

98

Jul-

99

Jul-

00

Jul-

01

Jul-

02

Jul-

03

Jul-

04

Jul-

05

Jul-

06

Jul-

07

Jul-

08

Jul-

09

Jul-

10

Jul-

11

Jul-

12

Jul-

13

Jul-

14

Meat Dairy


Pastoral land use change


Livestock numbers

25,000

35,000

45,000

55,000

65,000

75,000

19

90

-91

19

92

-93

19

94

-95

19

96

-97

19

98

-99

20

00

-01

20

02

-03

20

04

-05

20

06

-07

20

08

-09

20

10

-11

20

12

-13

Sh

eep

(00

0)

2,000

3,000

4,000

5,000

6,000

Cat

tle

(000

)

Source: Beef + Lamb New Zealand Economic Service Statistics New Zealand % change 1990 to 2012

Dairy +85%

Beef -15%

Sheep -45%


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


Indian buffalo beef exports

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Vo

lum

e (

ton

nes

)

Source Compiled by MIA from GTIS data

Indian buffalo beef exports (calendar years)


Getting product to market

Distance to major markets

A particular challenge for high value, time sensitive chilled products

-6%

+3%-16%

+13% +14% +12%

+7%

+2%

-2%+14%

+20%+6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

European Union North America Middle East North Asia Non-EU Europe Other

Volume Value

(Figures show % change from previous year)

Source: Compiled by MIA from Statistics New Zealand overseas merchandise trade data

NZ chilled sheepmeat exports by Region(by volume and value for the year ending June 2014)


Impact of slow steaming on red meat industry

Normal steaming – 24 knots

Slow steaming – 18 knots on Asia to Europe leg

Super slow steaming – 14 knots on Asia to Europe legDay

s re

quire

d


On-farm productivity

1990-91 2012-13p

Ewe Lambing % 100.4 123.2 +23%

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%Source: B+LNZ Economic Service, Statistics New Zealand


On-farm productivity

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Lam

b e

xpo

rts

(to

nn

es)

Tota

l sh

eep

nu

mb

ers

(mill

ion

s)

Total sheep numbers (millions) (left axis) Lamb exports (tonnes) (right axis)


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.


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


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


Thank you

representing new zealand meat processors, marketers and exporters meat industry update presentation...

Documents

new zealand meat processors

new zealand meat industry

meat exports

sheep meat processors

shipment of frozen meat

exporters industry overview

beef exports

exporters product diversity