September 3, 2009

New Zealand beef exports in 2009-10 are seen to drop 3 percent to 362,500 tonnes slaughterweight (swt), with the average price per tonne falling 10 percent, according to Meat & Wool New Zealand in its Sheep & Beef New Season Outlook 2009-10.

The total value of beef exports is forecast to decline 12 percent to NZ$2.1 billion (US$1.42 billion) due to a higher NZ$, poor demand from Japan and Korea, extreme price sensitivity among EU consumers, a continuation of the fall in cattle co-product prices - particularly for hides - and a smaller NZ herd. These factors are also countered by strong US demand for manufacturing beef and a recovery in the domestic economy which consumes around 20 percent of NZ beef production.

Markets were also mixed for NZ beef in 2008-09, with an 8 percent increase in shipments to the US (driven by high cow slaughter as the price of dairy goods fell from record highs) but a 17 percent decline to the combined markets of Japan and Korea, as shipments suffered from poor demand and increased competition from US product. The EU continued as a high value market, but its contribution as a source of export income was and is constrained by high out-of-quota tariffs, with only 3 percent of exports heading to the EU.

Lower cattle numbers this year, with the herd falling 2 percent (71,000 head) to 4.1 million as at June 2009, are due to three consecutive dry years impacting upon stocking rates. Export cattle slaughter is expected to fall 5 percent in 2009-10 to 2.2 million head as the industry attempts to rebuild the herd, assuming a drought-free year.

US$1 = NZ$1.44 (Sept 3)