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

 

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>

ALSO:

Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>

ALSO:

Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>

ALSO:

Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>

ALSO:

Earlier:

Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>

ALSO:

'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>

ALSO:

Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news