Falling beef production in US could benefit NZ
Adecline in beef production in the United States could have a positive spinoff for the New Zealand beef industry in 2014, according to a new report from Rabobank.
The decline in beef production in the US, which is New Zealand's largest beef export market, means New Zealand product will be in demand. However, 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.
New Zealand's beef sector would hope for increased returns in 2014 as supply tightened domestically and global beef demand remained strong.
New Zealand beef production was expected to be lower this year compared with the drought- affected production of 2013, Rabobank animal proteins analyst Matt Costello said.
"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."
Costello said New Zealand beef cattle numbers were not expected to decline greatly in the coming years.
Although beef supplies from New Zealand were expected to tighten in 2014, total beef production globally was forecast to remain relatively steady compared to 2013, Costello said.
"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. With tight US- supply forecast for 2014, this will help drive strong demand for New Zealand product."