August 17, 2007

New Zealand's major beef markets slow down

While New Zealand (NZ) beef and veal exports started this year on a strong note, shipments since May have started to slow down. NZ beef exports declined 5 percent on July 2006, to 29,552 tonnes slaughterweight (swt), statistics from the New Zealand Meat Board show.

The decline is largely due to tighter supplies and decreased shipments to the US, Japan, Korea and Taiwan.

The appreciation of NZ dollar also contributed to the decline as the NZ$ continued to strengthen, breaking through the 81US cents barrier at the end of the month. Imported beef prices have thus been higher in US$ terms but lower in NZ$ terms. Beef shipments to the US during July fell 16 percent on 2006, to 13,604 tonnes swt. Volumes to Canada for the month increased two fold, to 2,659 tonnes swt, as exporters searched for alternative markets to combat the weaker returns to the US.

Shipments to both Japan and Korea declined during July, with exports to Japan dropping 8 percent on July 2006, to 2,672 tonnes swt. Shipments to the Korean market in July fell by 30 percent on the same period last year, to 3,266 tonnes swt, as the availability of US beef steadily increased.

Singapore-based research firm Rabobank says NZ is looking forward to the North American market over the short to medium term, with increasing US beef prices, tight domestic supplies and forecast decline in the exchange rate. This outlook is dependent though upon the level of US imports from Uruguay, any eventual market access for Argentina and the allowance of Canadian cattle and boxed beef from animals over 30 months of age into the US.