- - news, features and articles for the meat processing industry

Featured Articles

New Zealand Beef Sector to Benefit from US Australian Drought

23 June 2014

Recent droughts in the US and Australia and growing Asian demand are expected to lift prices for New Zealand beef, according to the latest Situation and Outlook for Primary Industries Report.

primary industries reportChina is now New Zealand’s second largest market for beef by both value and volume.

New Zealand beef production is set to remain stable over the outlook period.


A declining beef herd offset by higher volumes of dairy cow beef will see beef production remain stable over the outlook period. This assumes average climatic conditions and improved productivity through increasing carcass weights.

This year to June 2014 beef production in New Zealand is estimated to fall 2.4 percent due to beef herds being rebuilt following the 2013 drought. Opening beef cattle numbers for 2014 were down one percent on 2013, to 3.70 million.

These numbers are expected to have recovered slightly in the current year.


The US remains New Zealand’s largest market for beef, accounting for almost half of all exports. Exports to China have increased and this market is now New Zealand’s second largest beef market by both volume and value.

New Zealand beef exports to Asian markets comprise mainly boneless frozen cuts and co-products which differ from the manufacturing (grinding) beef that is predominantly shipped to the US market.

In its Agricultural Long-Term Projections, the US Department of Agriculture forecast Asian beef imports to more than double to 3.9 million tonnes by 2023 with most of this growth occurring in the Chinese and Hong Kong markets where imports are forecast to grow from 340 000 tonnes in 2012 to 1.3 million tonnes by 2018.

A free trade agreement with China gives New Zealand beef a comparative advantage over product from competing exporters, such as Australia, Brazil and the US.

New Zealand will not be able to greatly lift total export volume to take full advantage of this opportunity due to dairy expansion impeding growth in beef cattle numbers.

But volume can be diverted away from certain markets where New Zealand beef faces headwinds on account of higher tariffs and unfavourable exchange rates compared to its competitors. In addition, gaps in global supply primarily from the US and Australia, as they recover from drought, will support prices and bring better value per tonne for New Zealand’s beef exports.

New Zealand’s beef exports to Indonesia are projected to increase over the outlook period.

However, uncertainty over the impact of ongoing Indonesian trade-restrictive measures on beef imports prevents any strategic focus on this market by exporters.

NZ beef exports to Asia


Over the next 18 months, beef export prices in US dollars (USD) are forecast to remain high.

This is due to both the US and Australia rebuilding herds following drought which is creating global supply constraints. In the US, beef prices reached historically high levels in March 2014 due to herd rebuilding from improved dairy profitability and several years of drought.

Further out, growing demand, particularly from the Asian markets, led by the expanding Chinese market, will continue to support higher prices.

Total export value for beef is forecast to continue to increase over the outlook period to reach NZ$2.42 billion by 2018.

Domestically, a high NZD limited growth in schedule prices in the year to June 2014.

Schedule prices are forecast to increase in the year to June 2015 as a result of higher international prices. Beyond 2015, slowly rising international prices and an assumed depreciating NZD against the USD should continue to lift schedule prices.


New Zealand beef numbers chart

Further Reading

You can view the full report by clicking here.

June 2014


Our Sponsors


Seasonal Picks

Meat Cuts and Muscle Foods - 2nd Edition