July 21, 2011

New Zealand's June beef exports slow down

The beef exports of New Zealand for the month of June were back to 13% less on-year, to 32,978 tonnes swt (NZ Meat Board), amid a decline in shipments to key markets such as the US, South East Asia and Korea.

Total beef exports for the first half of 2011 were 212,867 tonnes, 8% lower than the same period in 2010.

Exports to the largest market for New Zealand beef, the US, fell 13% on-year in June, to 15,358 tonnes swt, while a 36% drop to South East Asia (3,303 tonnes), 6% drop to Greater China (3,183 tonnes) and 11% decline to Korea (3,074 tonnes) contributed to the overall tightening. The only major markets to record significant increases were Canada and the EU, with shipments up 25%, to 2,567 tonnes and 47%, to 1,638 tonnes, respectively.

The main driver of the smaller shipments in June appears to be relatively weak demand for New Zealand beef in key markets. US production in 2011 has been well up due to drought across much of the south of the country, which has seen domestic cow prices drop, feeding into lower imported beef prices. The higher US production and relatively weak US dollar have also combined to make US beef exports more competitive in important markets such as Japan and Korea.

Indonesian import restrictions also had a significant effect, although licenses have been issued in recent weeks, boding well for the second half of 2011. This is expected to combine with lower slaughter through to the end of the season in September to relieve some price pressure on exporters.