THE PRESS TUESDAY, JUNE 14, 1983. The Meat Board finds markets

Press, 14 June 1983, Page 20

THE PRESS TUESDAY, JUNE 14, 1983. The Meat Board finds markets

News that the New Zealand Meat Board has negotiated sales of more than 100,000 tonnes of mutton and lamb in recent weeks is welcome, but unrestrained rejoicing would be premature. Almost any sale of sheepmeat is welcome at a time when the country has large stockpiles of unsold mutton and lamb and when it is facing increasing antagonism in traditional markets trying to cope with their own stockpiles that have resulted from heavily subsidised local production. Nevertheless, such successes must be measured in context. Accurate measurement is difficult until more than just the broad outline of the sales is made public.

Projections for this season’s kill in New Zealand, coupled with the stocks held from previous seasons, give a combined total of about. 520,000 tonnes of sheepmeat available for export by the end of this season in October. The sales announced by the Meat Board’s chairman, Mr A. M. Begg, yesterday, therefore account for less than one-fifth of what the Meat Board has for sale. The European market will probably take no more than 200,000 tonnes of New Zealand sheepmeat this year, and Iran has already confirmed that it will take 100,000 tonnes. These figures do little to allay fears that the carry-over of unsold meat to the beginning of next season might be substantially higher than the level of stocks held when the present season began.

Russia and Peru have been confirmed among the markets for the latest sales to be announced; The opening of markets in South America, albeit at low levels as yet, is an exciting prospect and a feather in the Meat Board’s cap. What is not known is whether the 100,000 tonnes in sales announced yesterday include, for instance, a contract with Iraq, which the Meat Board has been hoping will take at least 10,000 tonnes this year. Mr Begg believes that annual sales to Iraq could reach 20,000 tonnes without too much difficulty. Until the Meat Board discloses how many of its prospects have been exhausted in the sales announced so far, only the Meat Board will know what avenues remain for the sale of as

much as 100,000 tonnes of sheepmeat as yet uncommitted.

According to Mr Begg, some of the customers for the 100,000 tonnes sold in the last few weeks have asked the board not to disclose details of their contracts, and the board is complying with those requests. The board is not being unreasonable in giving such an undertaking, but this does not necessarily preclude it from indicating what sort of return is being averaged over the 100,000 tonnes. In the year to September 30,1982, the Meat Board lost almost $6O million in sheepmeat trading. The need to sell at almost any price the market will stand means that the board will face a trading loss again this year. The size of the loss will depend largely on what prices the board can get for the sales it is making at present.

The board faced some criticism at the end of last season for not having cleared more of the unsold sheepmeat, even if it meant a further loss. The critics argued that the existence of stockpiles would depress the prices for new season’s meat and that the meat carried over would become increasingly harder to sell. All of the 100,000 tonnes in sales announced yesterday is from this season’s production. The price received is not known, but it is plain that the customers have little or no interest in the meat from the stockpiles from last season, some of which is already being rendered down into tallow and meat meal. Because so much of this season’s meat is still unsold, commercial prudence requires the board to play its cards close to the chest. When the board finally gives an accounting—as it must—a great many people will wish to see just how successful its marketing has been in terms not of tonnes, but of dollars and cents. Among the keenest to look at the figures will be the meat exporting companies whose role the board has assumed. The Meat Board is now responsible for $1 in every $8 of New Zealand’s export income. The board has demonstrated that it can find the markets; it has yet to show that it can achieve a profit in doing so.