New Zealand’s Live Cattle Retreat Gives Uruguay an Opening
New Zealand’s Live Cattle Exit Gives Uruguay Ranchers an Opening
(Bloomberg) --
Uruguay, among the top cattle-exporting nations, sees an opportunity to increase shipments of dairy and beef breeding stock to China as New Zealand exits the seaborne livestock trade.
“Even though we are much further away, which makes us less competitive, the export of live cattle to China in particular grew a lot in the last year,” Agriculture Minister Carlos Maria Uriarte said in an interview. “We are going to have new opportunities.”
Uruguay has shipped more than 1.29 million head in the past five years, mostly calves fattened and slaughtered at destinations such as Turkey, Iraq and Egypt, government data show. For ranchers, it’s a lucrative side business, but one that’s attracting growing criticism over animal cruelty. In April, New Zealand said it will cease the export of livestock by sea within two years following the sinking of a cattle ship bound for China.
“We need to take all the necessary precautions and be zealous about the welfare of the animals involved in this activity so these types of accidents don’t happen,” said Uriarte, who is an active rancher.
After peaking at $271 million in 2018, Uruguay’s live cattle exports have cooled due in part to less demand by top buyer Turkey. Uruguay probably will ship fewer calves the next two years as droughts reduce calving and ranchers who fatten cattle for the local meatpacking industry pay up for animals amid a surge in beef exports, Uriarte said.
Meatpackers are doing brisk business again after the pandemic caused export revenue to fall 11% last year. Beef shipments rose 28% from a year ago to $618 million in the four months through April, with China buying $341 million, according to data compiled by the government.
Uruguay’s dependence on China was sorely felt in late 2019 when the bursting of a speculative price bubble led some Chinese meat importers to renegotiate or renege on contracts. Months later Covid-19 sent shipments to the Asian nation into a tailspin.
The government’s efforts to diversify export markets are slowly bearing fruit with Saudi Arabia authorizing Uruguayan beef and lamb imports last year. Uruguay is trying to open South East Asian markets to its meat and asked the U.S. last year for a bigger beef quota, Uriarte said.
“It’s essential to continue exploring other alternatives so if what happened in 2020 happens to us again we are better prepared,” he said.
At the same time, the government is measuring the meat industry’s environmental impact to address concerns about its contribution to global warming and sustainability.
That data will help suppliers reduce their footprint with a view to further differentiate Uruguay’s traceable grass-fed, hormone-free beef in the eyes of consumers, Uriarte said.
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