New Zealand beef exports to fall 4%

Beef exports from New Zealand may fall to an eight-year low this season as the high local currency erodes returns and farmers rebuild herds after record production last year.

Beef and veal shipments are likely to fall 4.2% to 346,800 tonnes in the year ending June 30, from 362,100 tonnes a year earlier, according to Meat & Wool New Zealand in a mid- season forecast. The weak global economy may temper recent gains in retail and wholesale prices, especially in key markets in North Asia and Europe, said the producer group.

New Zealand farmers are rebuilding stock numbers after successive droughts in key regions cut feed supplies and the high local dollar slashed farm-gate prices. Dry weather had also accelerated the conversion of farms to more profitable dairying.

Meat & Wool projects the currency to average 73 US cents this season, up 22% from a year earlier. It is projecting an exchange rate of 49 pence and 44 euro cents.

While beef volumes will rise, farm gate prices will fall 17% as the stronger local currency eliminates any benefit from firmer prices. The lower US dollar will also draw more US beef into higher-value Asian markets.