Beef remains the major source of optimism for New Zealand red meat producers in 2024, and the outlook for 2025 is similarly positive, according to a new report by Rabobank.
In its recently-released Global Beef Quarterly Q3 2024, Rabobank says New Zealand farmgate pricing for bull beef, prime and cull cow was above five-year averages over Quarter 2 and has continued climbing in Quarter 3.
“While North American beef prices continue at higher levels than those in the southern hemisphere, we did see further lifts in New Zealand cattle prices throughout July,” report co-author and Rabobank senior animal proteins analyst Jen Corkran said.
The report says strong United States demand and export pricing is driving a lot of the farmgate return for NZ.
“The US has become New Zealand’s leading market for beef exports through 2024. Export values to the US surged over May and June and, for the first half of the year, volume to the US was up 8% year on year (YOY) to 109,000 tonnes and the value up 17%,” Corkran said.
“Over the same period, volumes to China were down 21% YOY to 89,500t, the equal lowest shipment volumes since 2020.”
Corkran said procurement pressure from processors ias also adding upside to prices.
“Processors keen to get their hands on cattle have also been driving farmgate prices higher. This, along with the seasonal dip in cattle supplies, has added to the upward pressure on prices,” she said.
“Prime cattle prices neared NZc 700/kg cwt to start Quarter 3, well above the five-year average range. In saleyards, demand is high for R1 and R2 unfinished bull beef and prime beef animals, reflecting producers’ expectation of strong returns. New Zealand producers see beef as the shining light of 2024. Good conditions on farm, with a largely kind winter when it comes to rainfall, has meant good feed utilisation as well as a general feeling of wellbeing around the beef industry.”
With local production volumes forecast to be steady to slightly down over the next 12 months, the report says, New Zealand is well positioned to enjoy above-average returns, positive for both exporters and producers.
“Bull beef numbers on farm look to be below longer-term averages, with fewer animals reared in recent years,” Corkran said.
“Given the strong outlook, more dairy-beef calves may be reared over spring 2024 and, if it eventuates, this will add to beef production in New Zealand over 2026-27.”
The report’s feature article focuses on China – NZ’s major market for beef exports over the last decade – and says new consumer trends are shaping the country’s beef market.
“China has dominated global beef markets for the last five years, taking more than a third of
total global beef trade in 2023, but slower economic growth and a declining population are having an impact,” Corkran said.
“The Chinese beef market still has ample growth potential, given per capita consumption is lower than other developed Asian countries. However new consumer trends are emerging, which will change consumption. Overall, the premiumisation trend is slowing, while consumers are pursuing quality and value.”
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