OUR near-neighbour, New Zealand, is rarely mentioned in dispatches among Australia’s diverse basket of export beef customers, but 2025 is different.

Declining NZ herd and flock size is part of the reason for some surprising rises in exports across the Tasman this year.

Former NZ Prime Minister Jacinta Ardern’s carbon tax, even though it has since been rescinded, meant NZ livestock producers made decisions three years ago on managing their businesses that are now “coming home to roost,” an Australian beef export trade contact told Beef Central this week.

“It’s the biggest year for exports to New Zealand we’ve ever had,” the processor said.

“Our business has probably sold four or five times the amount of beef we have ever sent in the past. This year, the trade into NZ started earlier, and its broader in the range of cuts being taken,” he said.

“The business we do there is still small, in the context of other much larger export markets we service in North Asia, North America and elsewhere, but nevertheless it has grown significantly this year.  And mid-winter is always the low season in the NZ beef processing industry.”

For the fiscal year ended 31 June, Australian exports to New Zealand reached 5037 tonnes, equally split between chilled and frozen. The same 12 months a year earlier saw volume at just 1733t. Chilled has been the big growth segment.

“Last year was already the best year we had had in ages for sales into New Zealand, but this year is much bigger again” another trade contact said.

“Most winters we put together a few containers of mixed rumps and loin cuts for NZ customers. But this year that volume is probably five-fold, on a normal year,” he said.

“Of course, being mid-winter, it is the low season in NZ’s annual red meat production cycle, so if we were ever going to see some demand for Australian beef, it’s now. But this year has certainly ramped up to levels I’ve never seen before.”

“Most of what we’ve consigned recently has been trimmings for manufacturing meat, and everything else is chilled – mostly grassfed, which the New Zealanders evidently prefer. But this year – quite a rare thing, they have also taken a little 100-day type steak cuts, mostly into retail.”

Another part of the story might be displacement, another trade source said, with the prospect that more NZ beef (the entire country has a no HGP policy) is heading into China, to fill the void left by lack of supply out of the US. That argument is made all the more compelling because NZ is exposed to zero tariff into China under its FTA, while Australia is about to trigger its Safeguard level into China, creating a 12pc tariff advantage in favour of NZ.

As well as growing Australian beef exports to NZ, Australia equally sees small consignments of NZ rumps and loins coming into this market during the Kiwis’ high production summer period, to cater for Australia’s holiday BBQ season. Often they are only present in the market for a week or two, before disappearing again.

NZ processors struggling

As discussed in this earlier report, NZ red meat processors are struggling this year, with the nation’s largest operator Silver Fern pulling thousands of seasonal workers off the chain to match capacity with lower supply of livestock.

Last month Silver Fern Farms’ chief executive Dan Boulton told a Primary Industries New Zealand summit that his company had about 3000 workers on seasonal layoff, which normally would be running full steam as his company worked through the back-end of the (cull dairy) cow season, he told Radio New Zealand.

Mr Boulton said the NZ beef kill was down another 4pc on 2024 and the lamb kills down 9pc, creating procurement tension among the different processing companies. The national NZ sheep flock had fallen 21pc in the past decade to 23.6m, while dairy cattle fell by 13pc or 860,000 over the decade with the national herd now 5.8m.

Carbon displacing livestock

Big declines in the New Zealand beef herd and sheep flock have driven the increased demand for imported Australian beef. Some of that, at least, is evidently related to diversion of former NZ grazing land into carbon projects, with Swedish furniture giant Ikea tagged as one of the key land acquisitors, both for forestry projects for furniture timber, as well as carbon. NZ now accounts for 8.5pc of Ikea’s global forestry resources.

A 2019 investigation by Radio NZ found that the largest landowners in New Zealand were foreign forestry interests and that sales of sheep and beef stations to forestry interests had accelerated under the special forestry test.

A sister company to Swedish furniture giant Ikea has quietly bought up more than 23,000 hectares of New Zealand forests and farmland since 2021.

Chief insight officer at Beef and Lamb NZ, Julian Ashby, last year told local NZ media that sheep and beef farms traditionally sold for about $7000/ha, and dairy farms for about $15,000/ha, but carbon forestry companies offered up to $25,000/ha.

“It’s blowing all other land use classes off the map,” he told NZ media last year.

Carbon farming driving significant reduction in livestock numbers

More than 300 NZ red meat producers, processors and marketers gathered in Ōtautahi for the Red Meat Sector Conference last week.

While import tariffs into key market the United States and subdued consumer demand in China were top of the conference agenda, the surety of NZ livestock supply underpinned the sector’s concerns for a resilient future, Radio New Zealand reported. 

Livestock industry body Beef and Lamb New Zealand’s chair, Kate Acland, told the event that carbon farming on productive land under the Emissions Trading Scheme was driving the significant reduction in livestock numbers.

“New Zealand currently faces over-capacity in the processing industry,” she said.

“We have more plants and more processing lines than we have livestock to sustain them efficiently and it risks getting worse. The drop in stock numbers represents a lost opportunity. We owe it to farmers to face this challenge head on.”

RNZ reported that Ms Acland said greater collaboration among competing companies was a sensible strategic approach.

“If we want a future-fit industry, we need to be bold about optimising capacity and about how we collaborate,” she said.

“The fall in stock numbers is particularly frustrating, because at a time when there’s strong demand globally and high export prices, our processors have not been able to capitalise on this.”

“Our exports would have been hundreds of millions higher if the supply had been there.”

The conference came during a time when the country’s only farmer-owned red meat co-operative Alliance Group was preparing a case of private investment for its farmer-shareholders to vote on in the coming months.

Alliance announced the decision to shut its Smithfield meat plant in the South Island’s Timaru in October, amid dropping livestock numbers, particularly breeding ewes, with 600 people losing their jobs.

NZ farmers were getting record prices for beef, however they were driven in part by good demand amid tighter supplies, the conference heard.