Resilience, Opportunity and the Road Ahead for New Zealand’s Red Meat Sector
The first half of 2025 began strongly for New Zealand’s red meat industry, with export revenues up by 28 percent in the first quarter year‑on‑year despite lower volumes, as demand recovered notably in China. Tight global supply has also helped keep prices elevated.
However, the picture has now changed. In a surprise move the United States announced a 15 percent tariff on New Zealand goods, including red meat exports up from the earlier outlined 10 percent figure. This rate takes effect as part of President Trump’s “reciprocal” tariff regime applied to countries with persistent trade surpluses with the U.S.
Trade Minister Todd McClay and Finance Minister Nicola Willis have both voiced displeasure, stressing the tariff is disproportionate given New Zealand’s modest surplus with the U.S., estimated at around NZ$900 million on $9.3 billion of goods in the year to March 2025. Unlike Australia which retains the 10 percent baseline rate, New Zealand now faces a direct competitiveness gap.
Early estimates suggest the 15 percent levy could trim red meat export earnings by up to $300 million, with wine exports also expected to lose around $112 million. Given the U.S. has surpassed Australia as New Zealand’s second‑largest goods export market, accounting for about $9 billion in 2024 the timing is a major blow.
Despite the shock, the sector remains grounded in its value‑over‑volume strategy. With red meat exported to over 100 markets, industry leaders continue to emphasise premiumisation, maximising returns from every carcass and diversifying into high‑value avenues like fifth‑quarter products, genetics innovation and branded programmes like Taste Pure Nature in China.
On‑farm cost pressures have eased slightly: input prices fell 0.6 percent in the year to March, thanks to lower fuel, fertiliser, lime and pest control expenses and softer interest rates. That follows years of escalation that weighed heavily on farm margins.
At the Red Meat Sector Conference in July, Deloitte‑commissioned research estimated non‑tariff barriers were costing the sector $1.5 billion annually, highlighting the need to improve market access and streamline export processes. Meanwhile, strategy work on “Growing Value” aimed to lift overall sector returns.
Policy tension remains high. Farmers oppose what they see as overly ambitious methane reduction targets—currently 24–47 percent by 2050 - arguing for a more nuanced split‑gas approach that protects production. The pricing of agricultural emissions is equally controversial, amid concerns that blanket carbon levies risk undermining farm viability. The slow retreat of sheep and beef land into forestry—over 300,000 hectares sold since 2017 - is partly a response to policy and economic pressures.
Freshwater reforms are controversial too. Industry leaders favour shifting the National Policy Statement toward outcome‑based measures rather than rigid bottom lines and say existing sediment targets risk unintended farm retirements.
Innovation is still gaining momentum. AgResearch’s Renyu Zhang impressed judges at the MIA Dragon’s Den with a process converting low‑value mechanically deboned meat into umami‑rich flake for premium food applications. B+LNZ’s genetics platform nProve Beef, the Cool Sheep low‑methane breeding strategy and new breeding indices are giving farmers tools to lift both productivity and environmental credibility.
Health and biosecurity are also priorities: a recent breakthrough in fungal identification behind facial eczema could lead to better control strategies for a disease costing the sector an estimated $332 million a year.
Workforce and capability building is ongoing. The MIA scholarship programme welcomed five new recipients in 2025, and B+LNZ launched its Kāhui Māori agribusiness advisory group to ensure indigenous perspectives inform policy and extension.
Reducing tariffs on dairy and meat from Qatar and the Gulf Cooperation Council remain under negotiation and talks with India aim to open doors for red meat, while exploring growth in petfood and pharmaceutical by‑products export lines.
Despite the setbacks, the sector remains cautiously optimistic. Strong global demand, especially for lamb and beef - paired with premium branding and innovation continues to underpin growth. But the new U.S. tariff introduces a tangible headwind: officials are lobbying hard in Washington for revisions.
The message from industry remains consistent: New Zealand can succeed abroad by being high‑quality, reliable and value‑focused, but only if domestic and international policy settings don’t undermine progress.