New Zealand’s beef trade with China is set to almost triple in the next two years to $250 million after a breakthrough, according to a meat industry leader.
Anzco Foods chairman Sir Graeme Harrison, who was a member of the prime minister’s trade delegation to China, has come back eager about the prospect of the trade.
“That’s not being starry-eyed either,” he told stuff.co.nz.
“I’m an old hand but I truly believe we really do have a turning point coming in the beef business.”
New Zealand prime minister John Key secured a promise from Chinese premier Li Kegiang to approve more plants for export, something that was crucial for the trade.
Harrison said more plants certified for beef export to China would increase trade from this year’s expected $90 million to $250 million in 2015, “and exponential growth after that”.
China would be competing with the United States as New Zealand’s biggest export beef market within the decade, he added.
Japanese-controlled Anzco is the second largest beef exported in New Zealand. Its revenue was more than $1.2 billion in the year to September 2012 but reported an after-tax loss of $19 million, according to its latest Companies Office report.
Harrison believes the beef market will segregate into three areas: manufacturing beef for hamburgers, grass-fed thinly sliced marinated or seasoned beef for hotpots or barbecues, and grain-fed beef.
Young bulls would be good for the grass-fed markets, and could be crucial for slowing down New Zealand’s rising dairying conversions. Returns would have to be competitive with dairy grazing.
In US dollars, beef prices were around record highs.
“And if we were around the average US dollar [exchange] rate, farmers would have big smiles all over their faces,” Harrison said.