B+LNZ representing farmers at US Lamb Safeguard hearing

Over the weekend, B+LNZ Chair Kate Acland and MIA Chief Executive Nick Beeby testified before the United States International Trade Commission (ITC) in Washington DC, as part of its investigation into whether lamb imports are causing serious injury to the American industry.

The US is an important market for New Zealand lamb – additional unwarranted trade penalties would have a significant impact on New Zealand farmers, so it’s critical B+LNZ represents farmers’ interests at this case.

B+LNZ and MIA are working closely together on a coordinated, industry-wide response to the investigation. The hearing was the culmination of many months of work from our teams in conjunction with our US based lawyers.

Appearing before the Commission was an important opportunity to explain how our industry operates, the value of New Zealand lamb to American customers, and why we believe restrictions on imports are not justified. The ITC also heard from New Zealand and Australian government representatives; US producers, businesses and Australian producers and processors.

Making New Zealand’s case

• Speaking as both a farmer and B+LNZ Chair, Kate Acland explained how our pasture-based farming systems produce lamb with different characteristics from American lamb, including smaller, consistent cuts that meet particular customer needs. For example, the US is an important rack market. We send nine million lambs worth of racks to the US, where the US only has around two million lambs available for processing annually. Access to a diverse range of export markets is essential to maximising returns from the whole animal and supporting farmer returns.
• She discussed how New Zealand farmers had responded to similar challenges to the US such as declining sheep numbers, through sustained investment in genetics, research, and farm management.
• MIA Chief Executive Nick Beeby highlighted how New Zealand’s lamb supply is constrained and why we were unlikely to threaten the US with significant increases. Our breeding flock has roughly halved since the year 2000 and further declines are forecast. New Zealand exports to nearly 100 markets and has substantial access to the UK and Europe, meaning there is neither the supply nor the commercial incentive for a surge in exports to the US.
• A common theme across the testimony was that New Zealand and American lamb serve different customer needs, and there is an opportunity for both industries to work together to grow demand for lamb in the US. There was also discussion about the shared challenges facing farmers across New Zealand, the US, and Australia, including the impact of drought.

American businesses values New Zealand lamb imports

• The Commission heard from American businesses about the importance of imported lamb and how it often serves different customer needs, particularly when it comes to carcase size, portion consistency, and product specifications.
• Their evidence reinforced an important point: New Zealand lamb helps American businesses meet demand for products that are not always available from domestic suppliers in the quantities or specifications required.
• American businesses also highlighted the strong prices currently being received for American lamb and the potential consequences for US customers and restaurants if imports were restricted.
• They noted there is an opportunity to grow demand for lamb in the US with it remaining a relatively small part of the American diet. Reliable domestic and imported supply can help grow consumption, benefiting all producers.

What happens next?

• We remain clear in New Zealand's position that our imports are not causing harm to domestic producers and the evidence collected during the investigation does not, in our view, support imposing safeguard measures on lamb imports.
• The ITC is scheduled to vote on 13 November whether they believe the US industry has suffered, or is threatened with, serious injury.
• If the ITC determines serious injury, the investigation will move to the next stage, where potential safeguard measures will be considered. A safeguard measure could include things like a tariff rate quota or additional tariffs.
• A decision by the ITC on this would occur in late December, with their recommendation then going to the US Administration for its consideration early in the new year.

Our focus remains on protecting farmers' interests

• We know our farmers need ongoing access to valuable export markets, to help ensure strong returns.
• New Zealand has been a long-term, stable trading partner with the US and we believe there is plenty of room for both New Zealand and American lamb to meet different customer needs and support overall demand for lamb in the US.
• While the outcome of the investigation remains uncertain, B+LNZ and MIA will continue to work together, alongside the New Zealand Government and our US partners, to present the strongest possible case to secure the best possible outcome.

Although the New Zealand case is strong, we remain concerned given the current US approach to trade. We will keep you updated as the investigation progresses.