Green shoots in the sheep meat market

BY ANDREW RITCHIE

“Green shoots are appearing in the global sheep meat market,” according to Rabobank’s Senior Animal Protein Analyst, Jen Cokran.

Speaking to a Farming for Profit group in Marlborough she said the global red meat sector has endured some volatile times in recent years.

“The Ukraine war has been influential in driving up farm costs, and turmoil in the Middle East has resulted in additional shipping costs caused by the lack of security in the Suez Canal.”

Jen says the extra 14 days travel has imposed a risk to the chilled product market. The challenges faced by China’s economic malaise continues. They account for 60 per cent  of our sheep meat exports, 40 per cent of our beef and 30 per cent  of dairy.

“This should serve as a warning that we must look to diversify our export destinations. New Zealand and Australia are responsible for most of the sheep meat produced globally but there is an imbalance in our dependence on the Chinese market,” she said.

New Zealand exports 145 thousand tonnes while Australia exports 78 thousand tonnes.

“Interestingly, NZ’s home consumption of sheep meat is 1.9kgs per capita whereas the Australians consume 6kgs per head.”

The green shoots emerging are coming  from a reduced supply from Australia, and our higher value export markets continue to take increased volumes. The UK, EU and the US are the three biggest markets after China.

The EU is the most valuable market, bringing in $63.3 million dollars up 25 per cent on 2023.Export volume to the UK up 92 per cent year on year representing a 95 er cent upswing in value, reaching $40.2 million dollars.

As reported by Beef and Lamb NZ sheep numbers have dropped by 4.3 per cent to 23.3 million. They attribute this to land use change, pockets of drought over the last 18 months and slightly lower lambing percentages compared to 2023.

The South Island lamb price continues its upward trend and is now back within the five-year average at $7.70 per kilogram to the beginning of September.

The total value of sheep meat exports for July were up 5.4 per cent YOY to $255.7 million.