New auction process being mulled on by Kiwi meat industry

By Ankush Chibber

- Last updated on GMT

Related tags: Milk, Meat

New auction process being mulled on by Kiwi meat industry
The Kiwi meat industry is in the process of investigating whether it would be feasible for it to set up an online trading auction to sell export meat products as part of its Red Meat Sector Strategy.

The strategy, which is a combined effort of the Meat Industry Association (MIA) and Beef + Lamb New Zealand, is based on analysis by research and consulting firm Deloitte, and has been released to the sector.

The report calls for an online auction of export meat products in line with dairy giant Fonterra's Global Dairy Trade system for dairy commodities, in order to increase the industry's export earnings of US$8bn a year to US$14bn by 2025.

According to the red meat sector strategy, the online auction model would allow the meat sector to create a base traded price for commodity products like manufacturing beef, non-prime lamb cuts, tallow and offal commodities.

Such a model, claims the report, would bring benefits like transparent pricing, a market based single point of sale, and the ability for traders and processors to access additional supply if needed.

The new model, the publication notes, could set up a soft commodity market where New Zealand would become a clearing house for other countries’ commodity products i.e. the New Zealand price could become the global standard.

For now, the MIA is in the process of creating a research paper that will detail how the new trading platform may work. Also, a steering group representing all sectors of the industry is monitoring progress on the strategy.

New Zealand Food and Grocery Council chief executive Katherine Rich is one of members of the group. She told FoodNavigator-Asia that the strategy has the ultimate aim of increasing returns to the New Zealand red meat industry.

“The steering group thinks that the concept of a common trading platform for commodity meat products and commodity co-products is worthy of further consideration,”​ she said.

“Such a concept has worked for the dairy industry and while understanding that meat and dairy have some differences, we think that it is important to do the work to see whether it is a potential model for red meat,”​ added Rich.

Related topics: Markets, Oceania, Industry growth, Meat

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