NZ dairy cattle herd to decline for the first time in 10 years

24 September 2015

According to Beef + Lamb New Zealand’s New Season Outlook 2015-16, the New Zealand (NZ) beef cattle herd, as at 30 June 2015, was 3.59 million head – 2.2% lower year-on-year. The overall decline, which affected both breeding cows and trade cattle, is attributed to the lure of strong prices increasing turn-off, along with some regions challenged with tough feed supplies and drought conditions.

The NZ dairy cattle herd recorded its first reduction in 10 years, due to the lower dairy payout and strong beef prices – which reportedly encouraged culling of poor performing animals. Dairy cattle numbers fell 2.8% year-on-year, to 6.51 million head.

Beef + Lamb NZ forecast cattle slaughter to drop 8.5% for the 2015-2016 season (year ending September 2016), to 2.39 million head, off the back of elevated slaughter levels throughout 2014-15.

The forecast average carcase weight is 250kg per head, up 3.6% or 9kg year-on-year – the result of improvements across all categories, and the lower proportion of cows in the total slaughter.

Consequently, NZ beef production is projected to total 598,600 tonnes cwt in 2015-16, down 5.3% on 2014-15 levels, although still 2.6% higher than the five-year average.

NZ beef exports surged to a provisional total of 422,000 tonnes shipped weight (swt) in 2014-15, driven by strong global beef demand, high NZ beef production and a weaker NZ dollar. The outlook for the year ending September 2016 is for beef exports to decrease 5.3%, to 400,000 tonnes swt.

Beef + Lamb NZ expect that, as the US cattle herd enters its second year of rebuilding in 2015, US beef imports will continue increasing, before contracting in 2016, as US beef production ramps up.

Demand from North Asia, especially China, is reportedly forecast to rise during 2015 and 2016, as beef consumption is expected to continue outstripping domestic production.

The report suggests that Japan’s import demand during 2015-16 is expected to remain fairly steady, although Australian shipments are projected to account for a larger share, at the expense of the US.

Beef + Lamb NZ expect NZ beef exports to Korea to decline during 2015-16, attributed to the tariff advantages Australia and the US have as a result of Free Trade Agreements.

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