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

 

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

March 2017: Commerce Commission Delays Decision On Fairfax-NZME

The Commerce Commission has delayed its decision on the proposed merger between NZME and Fairfax Media's New Zealand assets, saying the deal is complex and it needs more time to assess the impact on both news content and the advertising market. More>>

ALSO:

Plan Plan: Permanent Independent Hearings Panel Proposed For Planning

The Productivity Commission recommends creating a permanent independent hearings panel like the one that cut through local politics to settle Auckland’s Unitary Plan, for the whole country. More>>

ALSO:

Statistics: NZ Jobless Rate Falls To 5.1% Under New Methodology

New Zealand's unemployment rate fell more than expected in the second quarter as Statistics New Zealand adopted a new way of measuring the labour market to bring the country in line with international practices, and while a growing economy continued to support jobs growth. More>>

ALSO:

Eggs-it Strategy: Countdown Programme For Free Range And Barn Launches

Countdown has today launched an Egg Producer Programme to support free range and barn egg farmers to increase the supply available for Countdown stores and our customers. More>>

ALSO:

LVRs: Banks Get An Extra Month To Meet New Lending Restrictions

The Reserve Bank won't impose new lending restrictions for highly-leveraged investment purchases until the start of October, giving lenders an extra month to clear their backlog of pre-approvals. More>>

ALSO:

Commerce Commission: Charges Against Youi Insurance

The Commerce Commission has filed charges in the Auckland District Court against insurance firm Youi NZ Pty Limited, alleging it employed misleading sales techniques when attempting to sell policies to consumers who were only seeking a quote. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news