October 27, 2006

New Zealand's beef output to increase 6 percent

Beef production in New Zealand could increase 6 percent in 2007 to 690,000 tonnes, reversing an expected drop this year.

New Zealand's 2007 cattle slaughter was forecast to increase 6 percent over 2006 to 690,000 tonnes while beef and veal exports were forecast to increase 7 percent to 580,000 tonnes, according to the USDA's Foreign Agriculture Service (FAS).

The increased adult cattle slaughter was a result of increased availability of bulls for slaughter, as well as an increase in the number of dairy cows supplied for slaughter. Calf slaughter would remain at a similar level to the estimated slaughter of this year.

New Zealand's total cattle slaughter for the current year could fall 5 percent to 650,000 tonnes compared to 2005 slaughter. As a result, exports were estimated to shrink 6 percent to 540,000 tonnes.

One of the key factors for a lower than forecast kill is that the dairy cow and heifer cull has been low due to increased retentions for milking. According to industry observers, many farmers were holding cattle back from slaughter as a result of lower prices in the first half of 2006 and perceiving the prices to go up later in the year, if the New Zealand dollar weakened.

Meanwhile, as part of New Zealand Food Safety Authority's (NZFSA) current endeavour of reassessing the country's mad cow disease categorisation measure, the former released a discussion document in April 2006, recommending changes to the requirements for imported beef products, said the FAS.

The beef industry in the country has been benefiting from the difficulties faced by the US and Canada in re-entering Asian markets. Even a re-entry of US beef in Japan would only make a small decline in NZ's market share and prices. Though the country's exporters might lose a share to the US exporters in the long-term, but are likely to retain some of the gains.

The country's grass-fed beef was different from the North American grain-fed beef, pointed out FAS. Though traditionally considered inferior to grain-fed beef, Asian consumers had developed a taste for the former during the absence of North American product.