Strong demand for New Zealand beef from both the US and China is likely to continue into 2015.
Following a year of stable export volumes, the outlook for New Zealand’s trade in the 2014-15 season is moderately positive according to EBLEX. While it is estimated that volumes will be back up to 4%, strong global prices and a more favourable exchange rate for the NZ dollar means that the value of trade could increase over 2%to NZ$ 2.7 billion.
An EBLEX analysis of Beef and Lamb New Zealand’s new season outlook shows that the main export destination for New Zealand beef in the first nine months of 2013-14 was North America, accounting for around half of all export volumes and overall value.
It says the US cattle herd is at record low and USDA forecasts a fall in US beef production of 1% in 2014-15. This reduction in domestic beef production, coupled with strong demand for processing beef, means the US demand for New Zealand beef looks likely to continue.
In China, New Zealand accounted for 11% of the import market in the first nine months of 2013-14 season, making them China’s third largest supplier of beef. EBLEX says with the country’s beef production levels remaining relatively unchanged into 2015, while consumption is expected to increase, it is likely that there will be ever greater demand in China for beef imports in the coming year.
The number of beef cattle as at June 2014 was recorded to be up 2% at 3.8 million head on the back of a carry-over of older cattle, particularly in the North Island. EBLEX also outline that the latest figures also reflect on-going dairy conversions, largely in the South Island regions, dairy cattle numbers increased 1% to 6.5 million head.
Despite this, it says the Beef and Lamb New Zealand forecasts show that the number of cattle slaughtered for export in the 2014-15 season will be back 4% on the year at 2.20 million head. This is largely down to reduced cull cow slaughterings, which were boosted by drought in 2013-14. However, while forecast to be back 8% on the year, a continuation of the dry conditions could lead to higher than expected cow turn-off.