January 7, 2011

Indonesia climbs up to New Zealand's second largest beef market

Increased and consistent demand from Indonesia made the country New Zealand's second largest beef export destination after the US.

The year 2010 saw some significant changes in a number of New Zealand's beef markets.

Australia, typically the biggest beef exporter to the US after Canada, all but shied away from this market completely during the year in favour of Russian and Asian markets. This left a gaping hole in the US imported beef supplies for most of the year which local exporters were able to take advantage of. Unfortunately for Kiwi beef farmers, due to the strong dollar against the greenback, the full extent of the high prices was not seen at the farm gate for most of the year.

The latest USDA cold storage figures show that boneless beef inventories increased 9% during November but are still well behind normal levels. As at November 30, storage volumes were down 8% on the five-year average for that time.

Through 2010, dairy commodity prices have gone up and down, depending on the balance of global supply and demand. However, prices have displayed greater stability than they did in the previous two years.

Fat-based dairy commodities have been the stand-out products in 2010. Anhydrous milkfat returns have also been outstanding in 2010.

Demand for dairy commodities continues to grow at levels exceeding current supply growth. As a result, prices for dairy commodities are expected to remain firm through the first half of 2011.