INTERNATIONAL MARKET

There are 3 main future challenges faced by the New Zealand lamb industry, that are:

 

1. Drop in lamb export growth

New Zealand sheep industry has a slight decline in lamb export growth lately in comparison to Australia (Colby, 2015).This is due to the competition of sheep farming with dairy farming and forestry in New Zealand, leading to an increase of sheep meat price in 2014 (Colby, 2015 and OECD/Food and Agriculture Organization of the United Nations, 2015).

 

According to the Delphi survey done with respondents, the number of sheep in New Zealand will reduce at a steady pace in the future due to the reduction of land available for sheep farming (Ministry of Agriculture and Forestry, 2009). The respondents for the Delphi survey consist of “farmers, processors, stakeholder groups, researchers, observers, government and international contacts and customers” (Ministry of Agriculture and Forestry, p. 17, 2009). If this incident continues to occur until year 2025, New Zealand lamb price will increase and will not be able to compete with other countries with more economical lamb export (Ministry of Agriculture and Forestry, 2009). In addition, with the increase of world population as shown in figure (3), New Zealand lamb export will not be able to supply enough sheep demanded by the market. On the contrary, this support the growth of Australia’s lamb export (Colby, 2015).

 

2. Lack of financial support

Based on the Ministry of Agriculture and Forestry (2009) states that, New Zealand meat industry have restricted amount of capital which reduce their chances to support innovation financially. Furthermore, farmers have insufficient incentives to fund in their co-operatives due to the value of the shares remain constant and the value is not affected by the accomplishment in the co-op (Ministry of Agriculture and Forestry, 2009). In addition, there is a possibility that the co-operatives are impotent to reinvest in a preferable rate (Ministry of Agriculture and Forestry, 2009). These constrains faced by the industry will reduce the opportunities for the New Zealand lamb to explore and improve the current systems used.

 

3. Change in traditional market

The graph in figure (1) shows a forecast of the future of New Zealand lamb importers, whereby the main importers in 2008 such as United Kingdom, North America and Mexico will reduce their lamb import (Ministry of Agriculture and Forestry, 2009). Whereas, countries in Asia and Africa such as China, Middle East, North Africa and Japan will be increasing their lamb import (Ministry of Agriculture and Forestry, 2009). This is due to the rapid increase of population in Asia and Africa but slow growth of population in Europe and American countries as shown in figure (3) (Roser, 2016).

 

The increase of population in Asia and Africa will increase in their lamb consumption, follow by an increase in lamb imports. These countries will become New Zealand future main importers which require more research and understanding on Asian and African consumers’ demand for lamb meat in order to increase the number of customers as well as Gross Domestic Product (GPD). However, if New Zealand has not realise the potential market present in the future and continue to rely on the traditional market, New Zealand’s GPD will remain stagnant or reduce steadily.