Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


US beef challenges present opportunities for NZ producers

Media Release March 15, 2013 1

‘An industry in transition’ – US beef challenges present opportunities for NZ producers

The United States’ beef cattle industry is undergoing a major transition, with a significant contraction of its domestic herd diminishing available beef supply locally and offshore. This presents opportunities for New Zealand producers to cash in on increased market share, according to a visiting US meat industry expert.

Rabobank’s Texas-based vice president for animal proteins, Don Close says the reduction in the US herd is “unprecedented”, with current on-feed numbers at six per cent lower than 12 months ago, and set to continue to decrease into the 2013 Northern Hemisphere summer period.

“Right now, with a significant period of drought, the ongoing tightening of our cattle herd is really becoming increasingly evident,” Mr Close said.

“We need rain to recharge our subsoil levels to ensure we have a good grass season. If this happens, we will see producers holding onto their cattle, particularly heifers, but if it doesn’t happen, those numbers will hit the slaughter market because it will be too dry to keep them on-farm.

“We’re damned if we do, damned if we don’t – no matter what happens with our season this year, there will be a shortage in beef supply going into 2014. We’ve painted ourselves into a tight corner.”

Mr Close is part of Rabobank’s Food & Agribusiness Research and Advisory division where he is responsible for analysing the beef and protein sectors. With a lifetime spent working in many roles in the US beef sector, including livestock buying, broking, meat-packing, risk management and lot-feeding, Mr Close has in-depth knowledge of the North American beef cattle industry.

Speaking at various functions across the North and South Islands this week, Mr Close said that, interestingly, although there has been a huge contraction in US corn exports, down 25 per cent year-on-year, there was also a sharp reduction in ethanol production, leaving grain-fed cattle and hog production above 2012 levels.

“These levels are going to drop in 2013 through to 2014, as the rationing in the domestic beef industry has not yet fully occurred,” he said.

Mr Close said the US had also overdrawn on its Mexican feeder cattle, adding to the decline in available beef supplies entering into the US market.

“The total Mexican cattle industry has declined, especially their heifers, eating into the breeding herd, when shipments increased into the US last year,” he said.

“And as the conditions in Mexico recover, we will see a similar story unfold with what’s happening with the US herd, with Mexican cattle numbers looking extremely tight.”

As far as North American supplies are concerned, Mr Close said Canada had also been trying to stabilise its cattle numbers after the challenges surrounding the BSE (Bovine Spongiform Encephalopathy, or ‘Mad Cow Disease’) issue that took place in 2003.

“Canada is a non-viable source of cattle or beef at present,” he said.

Adding to this, the recent difficulties around food security in the UK and Europe in the wake of the horsemeat scandal could potentially open doors for Australian boxed beef exports to be sent to this region, replacing former meat suppliers facing increased scrutiny across their supply chains, Mr Close said.

“While we are yet to see the full impact of the horsemeat scenario to know who the winners and losers are in this equation, it certainly raises the question about increased New Zealand exports into Europe to take advantage of the drama there,” he said.

“What is worth noting is the US-Europe Free Trade Agreement – which has not yet been ratified – but if this is eventuate it would probably open of the door for greater volumes of US beef entering into Europe taking more market share from other nations.

“The thing we have to realise is that nowadays, we’re playing in an international market – the years of single-country protein supply no longer exist,” he said.

“As soon as we see any signs of recovery, our lean beef market in particular will tighten up like we’ve never seen before, providing the real opportunity for New Zealand producers.”

ENDS


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:


NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • NIWA: The Year's Top Science Findings

    Since 1972 NIWA has operated a Clean Air Monitoring Station at Baring Head, near Wellington... In June, Baring Head’s carbon dioxide readings officially passed 400 parts per million (ppm), a level last reached more than three million years ago. More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news