September 25, 2006

 

New Zealand beef to hold onto Japan's beef market

 

 

As the US regained entry into the Japanese market, New Zealand's exporters say they would fight to retain the market share they gained signaling that its return would not necessarily mean a decline in New Zealand's beef exports to Japan, USDA said in a Sep 12 report. 

 

So far, New Zealand's beef industry has gained traction in the Japanese market as US and Canada continue to face difficulties in re-entry, the USDA noted in its report.

 

Although traditionally seen by Asian consumers as a more inferior product to grain-fed beef, New Zealand 

exporters hope that Asian consumers have developed a taste for their beef for the past two years American beef has been absent, USDA said, quoting sources from New Zealand's beef industry.

 

Moreover, New Zealand tries to set its beef apart, saying grass-fed beef has different product attributes to North American grain fed beef.

 

As Japan's 2005 beef imports remained below 2003 levels and New Zealand beef does not directly compete with US beef, the impact of US beef's return to Japan is lessened, the USDA said.

 

Marketing efforts on New Zealand's part would focus strongly on the fact that New Zealand beef is natural, freerange, disease free and highly nutritional.

 

Because of this, New Zealand's beef and veal export volume in 2007 is forecast to increase 7 percent to 580,000 tonnes.

 

However, internal factors have caused beef production and export estimates for 2006 to be revised downward.

 

New Zealand's 2007 cattle slaughter is forecast to increase 6 percent over 2006 to 690,000 tonnes while 2006 cattle slaughter has been revised downward to reflect a decline of 5 percent to 650,000 tonnes. Thus, exports are estimated to decline 6 percent to 540,000 tonnes.

 

The dairy cow and heifer cull has been lower due to increased retentions for milking.

 

Farmers are also holding back due to lower prices in the first half of 2006 in the anticipation prices would strengthen later in the year as the New Zealand dollar weakens.

 

Meanwhile, the reliance of New Zealand's beef industry on the dairy industry to supply animals for beef production continues to grow.

 

With the continued expansion of New Zealand's dairy industry, however, 60 percent of cows and bulls for export beef are expected to come from the dairy herd, a substantial increase over the 45 percent in 1990. Thus, despite the gradual decrease in beef cattle numbers, production of beef and veal have been seen to increase.