August 11, 2015

US demand for New Zealand's beef to maintain for next four years: Rabobank

As US farmers face an uphill task of rebuilding cattle herds following a serious drought in 2011, Rabobank expects the country's demand for New Zealand's beef will not wane, at least, for the next three to four years.

This is good news for the Kiwi beef sector that is enjoying record-high meat prices. By July this year, the Beef Index had increased 13% while half of overall beef exports are bound for the US. 

"The prices New Zealand's farmers have been getting for their beef are even more impressive, given that Australian cattle supplies have been extremely high over the past two to three years," said Rabobank's Matt Costello, noting of a possible beef shortage in Australia. "If you take away the key competitor to New Zealand exports, which is Australia, and you see a significant reduction in cattle out of that market, that bodes very well for the New Zealand industry."

US cattle will be migrated to two regions in the country, specifically, the southwest and high plains; and a recently developed capacity in central US, mainly the Dakotas and the Corn Belt, Rabobank stated in a report.

Cattle numbers are expected to increase by a total of 3.5 to four million head, with 1.7 million animals hailing from the new areas.