Long way from being out of the woods yet

The sense of calm and normality pervading the country for over three months has been shattered by the latest cases of community transmission the country. Until today New Zealanders have been going about their everyday lives, most of them still with jobs and being paid, at least until the wage subsidy ends, while the major concerns appeared to be what Judith’s raised eyebrows say, which political poll is closer to reality, and how many more people would break out of quarantine. Suddenly the media has a lot more than the election to get its teeth into.

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Time for sector to find united voice

Several organisations with an interest in the future of our agricultural sector have come out with strategies or visions for what needs to be done to find New Zealand’s place in the sun. One such report produced by the Primary Sector Council has been sponsored, one could say hijacked, by the government, and converted by MPI into a set of financial and environmental targets. Another is the result of independent research and consultation. Ideally either the government will engage with the primary sector to agree the best policy settings the industry believes necessary to meet these ambitious targets, rather than insisting on following the plan it commissioned to meet its own priorities.

Agility and innovation essential for meat exporters

The days of bemoaning our meat exporters’ lack of flexibility when everything was exported as frozen carcases are now a distant memory. Even the days of growing the profitable chilled lamb business without upsetting the EU authorities are receding into the distant past, as meat marketers cope with the complexities of marketing to previously time poor, technologically sophisticated consumers around the world now living in lockdown without ready access to restaurants.

Overseas markets holding up

In a recent conversation, Alliance CEO David Surveyor described world red meat markets by comparing them to traffic lights. Contrary to the evidence earlier in the year, when buyers stopped buying because of Chinese New Year closely followed by the Covid-19 shutdown, China has emerged as the brightest light with the traffic lights firmly set on green. The composition of Chinese orders has changed since the virus outbreak with retail and online sales growing considerably, while there are signs of hot pot outlets starting to reopen.

Meat industry performing well under Level 4

Processing is under severe constraints during the lockdown, although, as an essential service, meat companies are working hard to feed New Zealanders and service key export markets. In a newsletter to staff and suppliers, AFFCO states that processing restrictions on maintaining a minimum distance between employees means sheepmeat capacity is running at 50% of normal and beef capacity is close to 65%. This of course comes at the peak of the season, exacerbated by drought in several regions, particularly the top half of the North Island.

Meat industry in better shape today to cope with downturn

When I started to trawl through possible topics to write about this week, I had the bright idea it might be worth asking meat processors what contingency plans they have in place in case an employee, more particularly one on the processing floor, tests positive for the Covid-19 coronavirus. So far my research suggests it’s not yet an issue that has received a great deal of consideration by many companies, although it’s certainly on their radar.

Covid-19 a major test for government

Newspaper headlines driving panic buying in Auckland supermarkets suggest either we are all facing an existential threat or, more likely, a small percentage of the population is reacting like idiots, presumably stocking up large in case one Covid-19 case so far means they will have to self-isolate.

Drop in China beef prices not expected to last

It is difficult to see any real reason for panic over the sudden pre-Christmas reduction in demand for sheepmeat and beef from Chinese importers which has led to prices coming off their peak. Livestock suppliers will already have noticed a drop in schedules from the elevated levels processors had been paying over the first couple of months of the season. It’s tempting to fear the worst given past experience with high prices paid by meat processors which have inevitably been followed by a sudden crash and a long slow recovery.

Brexit impact to drag on and on

Any hopes Brexit would be sorted this year are receding further into the distance with every new twist and there’s a strong chance the situation will have changed again by the time you read this. For obvious reasons I won’t make firm predictions about the likely outcome, because it’s impossible to predict which of several will eventuate, but it is possible to assess the long and short term risk factors for New Zealand exporters who must get on regardless with securing orders and satisfying customers.

ANZCO confident no repeat of horror year

ANZCO’s 2018 pre-tax loss of $38 million was the worst result in the company’s history. The exporter has traditionally posted a profit, even in difficult years for the meat industry which has always had a chequered history, so it is critical to assess what went wrong and, more important, how to make sure it doesn’t happen again.