What does NZ’s (and by inference) Hawke’s Bay’s meat economy look like?

Who does one believe?

Reading through the past week’s farm newspapers, one can’t help but feel like being put through the meat grinder.

The front page of Farmers Weekly touts, ‘Rising product prices lift farmers’ mood’. The article cites a Federated Farmers survey reporting high spirits. But then the numbers come forth:

• Confidence in economic conditions “surged” from negative 66% in July to a net positive score of 2% in January.

• A net 23% of farmers expect economic conditions to improve in the next year.

• 16% expect production to improve.

• But only 54% expect to make a profit.

Doesn’t sound like a growth stock to me!

These are mostly sheep, beef and dairy farmers talking.

However, then I see the headline ‘2024 Red Meat Exports End On A High’, with the article, citing the Meat Industry Association (MIA), noting that total red meat export value increased 17% over the previous year, slightly topping $1 billion.

But wait! Now I turn to Rural News, where I read on the front page remarks paraphrased from MIA chief executive Sirma Karapeeva: “This year won’t be an easy one for the red meat sector … there are big domestic and international challenges on the horizon as well as a lot of geopolitical issues NZ cannot control.” Nonetheless, she says the industry “is in a good position to pivot and mitigate the risks if they come.”

Whew, I’m relieved. Until back in Farmers Weekly again I read this assessment, headlined ‘Volatile future lies ahead for sheep and beef’, from Allan Barber, the paper’s regular commentator on the meat industry:

“There are huge question marks over the long-term future of sheep and beef farming and all the associated businesses that depend on it.

“Threats to the sector abound: the persistent fall in sheep numbers, pricing volatility with a mainly downward trend, agricultural land conversion to other uses including urban sprawl, and the increasing age of pastoral farmers all point to a sector that has passed its peak. The chances of it staging a permanent reversal are nil.” [Italics added.]

In the piece (you can read it here), Barber also discusses the impacts of addressing climate change and the likely Trump-generated trade war.

And he makes this interesting comment: “New Zealand and Australia will continue to obtain a certain level of demand for premium product from those consumers who can afford it, but the majority of the carcase must still compete as a commodity against cheaper proteins.”

I wonder, as the Government steamrollers ahead to legislate to encourage GMO agriculture, whether those premium consumers have genetic modification on their ‘must buy’ shopping lists.

I wonder why anyone would want to build a very expensive dam in Central Hawke’s Bay to support the growing of livestock for protein.

And I wonder about the vulnerability of HB’s sheep and beef sector overall, which according to our Regional Economic Development Agency (REDA) currently accounts for 5% of the region’s GDP, 6.5% of its jobs, and more than 36% of its estimated exports. 

REDA’s recent analysis of the region’s economy commented that productivity in the sector was low and has declined over time, and noted “significant challenges” in meeting peak labour demand, also impacting on processing productivity. It predicted slight job loss in the sector in a BAU scenario.

However, REDA’s report could not identify a specific growth opportunity for this industry, despite listing it as one of HB’s six industries with “greatest potential to drive value and employment growth”. Go figure!

So what should one conclude about the future of sheep and beef for Hawke’s Bay?

Here’s an earlier BayBuzz article featuring pessimistic views from one of HB’s premiere meat entrepreneurs, Craig Hickson of Progressive Meats. He comments: “I feel disappointed to the extent that, in combination with everyone, we haven’t been able to deliver returns through sheep and beef production that makes it a continuing competitive land use option.”

Have we reached an industry cattle stop: ‘peak meat’? Is Barber too alarmist? More trade press warnings here. BayBuzz would love to hear from more of the region’s meat insiders.

Personally, I hope my final meal is a steak! But how many of us does that take to support a viable industry?