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

 


Beef in 2014: Demand bright, local supply tight

Beef in 2014: Demand bright, local supply tight

New Zealand’s beef industry faces brighter prospects in 2014 with strong international demand, combined with tight local supply, according to a new report released by agribusiness banking specialist, Rabobank.

The report, Beef in 2014: Demand bright, local supply tight, says the decline in beef production, particularly in lean beef, in the United States – New Zealand’s largest beef export market – means New Zealand product will be in demand.

However, the Rabobank report cautions, in other less traditional markets – where cost is the primary determinant – growing competition from India should be expected, with increased local Indian supply available for export.

Report co-author, Rabobank animal proteins analyst Matt Costello says, New Zealand’s beef sector will be hoping for increased returns in 2014 as supply tightens domestically and global beef demand remains strong.

“New Zealand beef production is expected to be lower in 2014 compared to the drought-affected production of 2013,” Mr Costello says.

“Improved seasonal conditions in the second half of 2013 has helped turn around the fortunes since the peak of the drought and has set things up for an improved spring and summer for 2013-14. The overall increase in processing levels through 2013 was the direct result of a high cow kill, as more cows were carried over from 2011/12 due to favourable pasture conditions in New Zealand.”

Mr Costello says New Zealand’s beef production is likely to be limited due to the expansion of the dairy herd, although beef cattle numbers are not expected to decline greatly in the coming years. The rapid incremental growth in dairy numbers witnessed over the past decade is expected to slow as pressure from suitable land availability and increasing emphasis on environmental regulations grows.

Competitor watch in 2014

Exporters will see increased interest from the US while increasing competition from India will likely limit growth in exports to a number of South East Asian and Middle Eastern Mr Costello says although beef supplies from New Zealand are expected to tighten in 2014, total beef production globally is forecast to remain relatively steady compared to US hungry for beef

The US will experience a significant decline in beef production in 2014, the report says.


“The urgency to rebuild the US herd is becoming ever more pressing due to the ongoing liquidation occurring over the past three or so years,” Mr Costello says.

“If weather permits, US producers will need to grow cattle numbers which are now at 60-year lows. With tight US supply forecast for 2014, this will help drive strong demand for New Zealand product.”

Indian buffalo meat exports to remain strong Increasing exports of Indian buffalo meat in 2014 will target South East Asian markets, according to the Rabobank report.

“After becoming the world’s second-largest bovine exporter in 2012, the growth in the Indian buffalo meat shipments continued throughout 2013, increasing four per cent, or 22,000 tonnes swt, in the first six months of 2013,” Mr Costello says.

“Of particular importance is India’s continued push of buffalo exports into markets such as Vietnam and Thailand presumably through grey channel for re-export to China.”

Asian market dynamics

Despite competition from the US for New Zealand product, exports to China are forecast to remain strong in 2014 as China will continue to face a supply deficit, creating strong demand for imports.

Rabobank expects Brazil to regain formal access to the Chinese market in early 2014, which will give China the opportunity to diversify its supply base. New Zealand currently accounts for 18 per cent of China’s formal imports.

Rabobank New Zealand is a part of the international Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 110 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative operates in 42 countries, servicing the needs of approximately 10 million clients worldwide through a network of more than 1600 offices and branches. Rabobank New Zealand is one of the country's leading rural lenders and a significant provider of business and corporate banking and financial services to the New Zealand food and agribusiness sector. The bank has 32 branches throughout New Zealand.

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Auckland Outage: Power Mostly Restored Overnight

Vector wishes to advise that all but 324 customers have been restored overnight. These customers are spread throughout the network in small pockets. The main St Johns feeder was restored around midnight allowing most of the customers in all affected areas to have power this morning. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
More RSS  RSS
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news