The Country 14/04/25: Tom Young talks to Jamie Mackay

We ask Affco’s national livestock manager who’s going to pay Trump’s tariff: American consumers or New Zealand farmers? And with an insatiable demand for our red meat at the moment, will our processing companies enter into an end-of-season procurement war?

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Episode Transcript

Speaker 1 (00:00):
One of the great success stories of the primary sector
this season has been red meat well above expectations. But
how much of a threat is Trump and as tariffs.
Let's find out what's happening on the ground at the
cold face. Tom Young is afco's National livestock Manager. Tom,
how much of the ten percent tariff is going to

(00:20):
be paid for ultimately by New Zealand farmers. Good afternoon, by.

Speaker 2 (00:25):
The way, Yeah, yeah, hi Jamie. Look, we start out
with the intention of making the Americans pay the tariff themselves,
so we just we held onto our pricing at pre
tariff levels I guess for a bit. But we have
seen in the last few days or I guess a
week or so, we've seen probably the Australians of clawback

(00:46):
five percent, so half the tariff are you but it
still works? Okay, Like we're still keep you where we're sitting,
and we don't think at this point in time it's
going to have any adverse effect on schedules, so we're
comfortable with them.

Speaker 1 (00:59):
Okay, that's the US. What about our biggest market, our
biggest trading partner, not for red meat, that's the US currently,
but China there's going to be a lot of collateral
damage out of this trade war. It's going to affect
the Chinese economy ultimately, that's got to affect us.

Speaker 2 (01:15):
Yeah, yeah, I guess you're right. I mean, what we
have seen, or what I can coming on now, is
we've seen a huge amount of demand come out of
China in the last week or two. So there have
been some sort of I guess, some big players talking
to us, questioning us whether they can have big volumes
of meat, and I'm talking hundreds of loads of meat,
and we don't have the product. So obviously we're going

(01:38):
into the time of the year we were shortening up
on product. Capacity is starting to get backed off, but
we simply don't have a heavy amount of meat that
the demand is therefore coming out of China. So they
sort of come out of nowhere and they're sort of
building it up and they're desperate to get some product.

Speaker 1 (01:55):
Now, I see an Aussie analyst I've just forgotten his name,
you might better fill in the middle pieces for me,
said that Lamb's going to be ten bucks of quilo.
Happy days.

Speaker 2 (02:06):
Yeah, happy days. I mean I think his name was
Simon Cruelty, and I mean nice to say, but probably
doesn't really help New Zealand and the drives the price
of storestock mad and can probably put expectations in people's
heads that might not be there. I think my personal
view is if you had, if you had a prediction

(02:27):
from a large company in New Zealand, a red meat company,
and they said, look, we think it might get to
this level, it's a bit more sort of believable than
a third party. He has no sort of vest of
interest in the New Zealand red meat sector.

Speaker 1 (02:40):
So we're getting near the end of the season, we're
all scrambling or you guys are scrambling to supply enough
meat to these markets the US and China which just
can't seem to get enough of it at the moment.
Do you know what that sings out to me, Tom Young?
Procurement war.

Speaker 2 (02:56):
Yeah, everyone talks about a procurement war. I think it's
it's already super competitive. There's enough, you know, people looking
to buy red meat in New Zealand and processes that
you're never not going to get a competitive price week
on week at any time of the year. I guess
in the middle of winter, late winter, you'll see some
pressure on the price. You know that we're a long

(03:17):
way through the lamb coill Now beef and lamb took
the land call sort of back a million lambs, so
there's no doubt we're going to have a shortage and
all out precurrement war. I don't know. I think everyone
puts the beast foot forward. Now, the contract or a price,
a weekly spot price, and does the best to sort
of buy some lambs there going broke. So yeah, our
view will always be to have a competitive price, but

(03:40):
we're not going to take it to a level where
we don't exist in a year or two.

Speaker 1 (03:44):
Stime, a sheep farm is ultimately going to win by
being the last man standing. If you've still got a
sheep farm and you're raising some lamb, if the pine
trees haven't invaded your sheep farm already, there's going to
be so few that they're going to be worth a fortune.

Speaker 2 (04:00):
I mean they've rebounded. The price is rebounded massively, has
it in the last six seven, eight months? So, but
it's always been a psychical business, hasn't it. Red meat,
it goes up, it goes down. It's no different dairy farming.
I think if you've got a farm and you've got
a good system and you've got a way of farming
and that works. You know, whatever your percentage of sheet

(04:21):
to cattle are, you need to stick with it. I
think people that change stock classes and dive in and
out of markets and try and find elderado or pennacea
somewhere generally come on glued. And the people that stick
with a good policy ten to come out of it
on a five year average and a better position than
those are in and out of different classes.

Speaker 1 (04:39):
To stop, we've heard how the US is going to
take several years more than one to build up the beef.
Does that mean that like beef prices for the next
few years tear off aside are going to be strong?

Speaker 2 (04:52):
Well, you think so, wouldn't you. But I mean we
have seen times when you know, South America can turn
up with a lot of beef too out of nowhere.
So logically you'd say, if there's a global shortage of
price will be held up. But you know, there have
been times when we've seen, you know, that shortage has
been shortened in a hurry and all of a sudden,

(05:12):
countries have found a lot of beef that probably people
haven't expected either. So I would say you know, looking
out over the next next six to twelve months, probably
pretty healthy pricing, Pretty hard to see too much past that.
I would have thought.

Speaker 1 (05:26):
Let's just finish on weather and track conditions as I
like to call them, around the country. We know them.
We know the North Island's been particularly dry. The west
part of it, the dry part of it has received
some useful rain. You guys on the East coast and
Hawk's Bay where you're based, have fared much better. But
you've headed into a typically dry autumn.

Speaker 2 (05:47):
Yeah we have. So, yeah, we're probably a little bit
too dry now, but hopefully this Wednesday and Thursday there's
sort of fifty to one hundred miles predicted with the luck,
so that will turn us around. If it does arrive, it's.

Speaker 1 (05:59):
Called Easter Tom. It's a rain maker and a windmaker,
that's right. He thank you very much for some of
your time today as the National Livestock Manager for for
f CO onwards and upwards for the meat prices Bugger truck.

Speaker 2 (06:13):
Leape say wonderful. Thanks Jamie,