What’s in store for NZ beef?

18 May 2017

New Zealand’s (NZ) beef cattle herd has continued to contract in 2016-17, with strong prices driving an increase in numbers processed.  As at 30 June 2016, NZ beef cattle numbers were down 2.1% on the previous year, provisionally at 3.47 million head, according to Beef + Lamb NZ’s Mid-Season Update.

For the current season (year ending September 2017), cattle slaughter is projected to fall 3.7% from last year, to 2.42 million head. This decline, however, follows back-to-back years of high slaughter in 2014-15 and 2015-16, when high international beef prices and low dairy prices saw many NZ producers reduce their herds.

The NZ dairy sector underwent a period of expansion from 2006-07, with increased cow and heifer retention, before a period of retraction began 2014-15. Despite an anticipated 8.9% drop year-on-year, cow slaughter is expected to stabilise around 1 million head this year. Following the larger cull in 2015-16 with the anticipation of drier El Niño conditions, heifer slaughter is likely to be lower in 2016-17, to 419,000 head, with producers likely to retain more heifers as they rebuild their herds.

Steer and bull slaughter, on the other hand, is forecast to increase 1.7% and 3.1% year-on-year, respectively, reflective of the stronger beef market and bull calf retentions over the previous two seasons.

NZ’s beef exports are forecast to ease 1.8% from last year, to 416,000 tonnes swt for the year ending September 2017. The stabilisation of the dairy herd and the limited supply of cattle are both contributing factors. Production in the US, a major destination for NZ exports, is forecast to increase this year, which is anticipated to result in a drop in the average value of beef and veal exports. The decline is underpinned by a lower demand for imports from the US, combined with the strong NZ dollar and an increase in global production. 

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