February 2, 2007

New Zealand's cattle slaughter to increase 7 percent

New Zealand's total cattle slaughter is forecast to increase 7 percent to 730,000 tonnes in 2007 while beef exports could increase 8 percent to 620,000 tonnes. 

Post forecasts increased slaughter across all cattle classes due to a number of factors according to a US Department of Agriculture report.

The forecast increase in adult cattle slaughter is the result of strong beef prices in recent years, which increased retentions of dairy and beef calves in 2004 and 2005 for beef production.  The cow kill is forecast to increase as older cows are culled out of the dairy herd.  Live heifer exports declined sharply during 2006, but the dairy industry continues to grow, although at a slower rate.

New Zealand farmers continue to benefit from strong prices due to a couple of factors, says the USDA report. The industry continues to benefit from the disrupted supply of North American beef to Asia, retaining the market share gained following the detection of BSE in the US and Canada. 

Farmers are also benefiting from continued strong prices in the US market, which accounted for 45 percent of New Zealand's beef exports by value in 2005.  The strong prices received in international markets are offset by the ongoing strength of New Zealand's dollar. 

As a result of concerns over BSE, the New Zealand Food Safety Authority (NZFSA) continues to require case-by-case assessment of US bovine products before importation. With the assessment now over, NZFSA will lift that restriction once both sides agree on certification language that must accompany meat imports. 

According to the New Zealand government and media, the concept of "food miles" is gaining strength in Europe. The proponents of food miles argue that European consumers should not purchase food products from countries like New Zealand because of the energy and carbon dioxide emissions associated with transporting foods over a large distance. They propagate buying locally grown produce.

However, a study by a New Zealand University has found that the energy used in producing and transporting a New Zealand food product is, in most cases, less than that of its UK counterpart, by the time it reaches point of sale in the UK.

For the full USDA report, please click here