August 22, 2007

Lower New Zealand dollar improves cattle prices

The drop in the New Zealand (NZ) dollar by as much as 12 percent at 68.9 US cents last week improved farmgate prices for cattle, according to the NZX Agrifax Market Indicator. Farmgate prices for cattle have increased with manufacturing bull and cow gaining 28 cents per kilogramme (kg) and 22 cents/kg, respectively. NZ beef slaughter is reportedly at a seasonal low, while US demand has started to out pace supply, adding upward pressure on prices.

Along with the falling NZ$, demand in NZ's main export market, the EU, is starting to pick up in preparation for the Christmas period, with NZX Agrifax indicating that buyers are becoming increasingly aware of NZ filling their import quota.

The NZ$ managed to partially recover in the past few days, reaching 69.85US cents on Tuesday (August 21).