New Zealand’s beef trade is now worth more than lamb

Overall cattle numbers in New Zealand in the first six months of the year have fallen, with beef cattle numbers back 2% to 3.6m head, AHDB says.

The organisation for the English beef and sheep industry (AHDB) said this drop in cattle numbers was predominantly driven by high prices stimulating slaughter.

It said that this was also driven due to some regions having the added impact of tight feed condition due to the climate.

For the first time in 10 years the dairy herd has shrunk, back 3% on the year at 6.5m head, according to AHDB.

With poor returns for milk so far this year against a much better scenario in the beef market the culling of poorly performing cows has been significant, it said.

With fewer cattle on the ground, for the 2015-2016 season Beef and Lamb New Zealand forecast that the number of cattle slaughtered for export will fall 9% on the year to 2.4m head.

This, AHDB said, represents a notable fall from the high slaughter levels of the 2014-2015.

Cow slaughterings, in particular, are forecast to be significantly lower than the record numbers seen this year, given the overall smaller herd and the expectation that the dairy herd will fall again next year, it said.

AHDB said that the forecast is for carcase weights to increase modestly, the combination of an improvement of average weights for all classes and a lower share of cows in the overall slaughter mix.

However, despite this increase, it said that weights for all classes of cattle are expected to remain well below those achieved in 2011-2012.

As such, at 600,000t, export beef production is forecast to be down 5% on the year, it said.

It is worth noting, AHDB said, that this fall reflects the record high production in the 2014-2015 season and at this level production is still running ahead of the five-year average.

Strong demand for beef, particularly in the US, a weaker NZ Dollar against the US Dollar and high production resulted in an increase in beef and veal exports in the 2014-2015 season, provisionally up 8% at 422,000t, it said.

Cattle prices gained more than 30% over the season which, in turn according to AHDB, increased export prices.

Consequently, total returns for exports are estimated to be up significantly on the year at NZ$3.57 billion, despite a fall in the value of co-products, it said.

According to these estimates, AHDB said that beef and veal export returns are greater than those for lamb and mutton exports for the first time ever.

In the coming season, it said that exports are forecast to decline in line with production, being back 5% at 400,000t.

Overall, beef and veal returns are still expected to exceed last season’s record, up 2% at NZ$3.65 billion to be well ahead of returns from the sheepmeat trade, AHDB said.

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