New Zealand export beef production is forecast to lift 3% in
the 2011-12 season to 588,000 tonnes, of which 70% will come
from prime cattle production, Rabobank's latest beef
quarterly says.
Carcass weights were also forecast to lift 1.4% this season,
based on improved pasture conditions.
While elevated currencies, global economic uncertainty and
climate risks might pose short-term obstacles for global beef
markets, the longer-term outlook remained "bullish".
An increase in global supplies was expected late this year,
against a backdrop of uncertain economic growth.
New Zealand markets would also feel some ongoing pressure
through to the first quarter of 2012, the report's co-author
Rebecca Redmond said.
A key factor was the slaughter of United States' cattle herds
due to severe drought in the southwest, resulting in an
increase in US domestic supply, a key New Zealand market,
against a backdrop of softening consumer demand.
About 25% of US beef cows were farmed in Texas, Oklahoma and
New Mexico - areas that were experiencing the worst drought
on record.
US beef production would surge early next year but rapidly
decline later in the year and remain low until at least 2014.
The US decline would likely support higher farm gate prices
in New Zealand.
"The US is a key export market for New Zealand beef but also
a key competitor in a number of significant overseas
markets," Ms Redmond said.
In New Zealand, the supply of beef cattle through quarter
three remained traditionally low during the winter months and
prices were overall 1.5% lower than the corresponding period
in 2010.
Although prices reached near-record levels of $4.35/kg in
April this year, prices continued to soften through much of
quarter-three ending at $3.85.
"Prices have started to lift again in October but still sit
at very similar levels to last year," Ms Redmond said.
Indonesia, traditionally New Zealand's third largest export
market, had several months of "lacklustre" demand as import
levels moved close to the allowable limit of 50,000 tonnes
from all supplying countries for the year.
July exports jumped to an unprecedented 5000 tonnes as import
permits for beef from New Zealand were released during
Australia's ban on live exports.
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