WELLINGTON: Beef production in New Zealand is predicted to increase in the 2014-2015 season, due to impacts of higher worldwide demand and lower dairy returns.
Cattle slaughter is forecast to increase 1.3 per cent for the 2014-15 season (October to September) compared to the previous year.
Total slaughter number is expected to reach 2.36 million head, according to Beef and Lamb New Zealand’s Mid-Season Update.
Reasons for this include the sharp decline in the dairy payout, resulting in greater numbers of dairy heifers and cows culled, as well as an increase in bull slaughter, following two seasons of bull calf retentions.Consequently, a rise in beef production of 1.2 per cent year-on-year is expected.
Although beef and veal exports are only expected to rise by 1.2 per cent compared with the previous season, the value of these exports is forecast to grow by 24.5 per cent.
This forecast is driven by the combination of high global beef prices, caused by tight supplies and strong demand, and the depreciation of the New Zealand dollar against the US dollar.
Demand for New Zealand’s beef in the US is expected to remain strong in 2015, as supplies remain low. An improvement in seasonal conditions in the US has led to a phase of heifer and cow retention to rebuild the herd, resulting in lower domestic production.
Chinese demand for beef is also reported to increase during 2015, as growth in domestic consumption exceeds growth in production.
However, the Mid-Season Update noted that a large portion of Chinese imports is anticipated to be through grey channels (mainly Hong Kong, Vietnam and Thailand).
With beef export volumes out of Australia forecast to decline in 2015, due to tighter supplies, the depreciation of the Australian dollar is likely to drive the competitiveness of Australian beef exports for the remainder of the year.
