Demand for meat forecast

Commentators are continuing to express confidence in the future of the meat industry, more so than farmers.

Rabobank's Australian-based animal protein senior analyst, Wendy Voss, told farmers in Central Otago last week that demand for all meat was expected to grow 20% in the next decade, at a time supplies were forecast to continue falling.

That extra demand would come from developing nations and would outstrip supply, Ms Voss said.

"The outlook for Australia and New Zealand sheep meat and beef is very positive," she told 300 farmers at the South Island High Country committee's biennial field day in the Nevis Valley.

It was a message many commentators have been delivering in recent months, but one many farmers have yet to accept, given generally low returns over several years.

Ms Voss said fluctuating prices had caused a global decline in the supply of sheep meat and beef.

Australian sheep numbers have fallen from 100 million in 2006 to 70 million this year, and United States cattle numbers have reduced in 13 of the past 15 years, partly because of economics.

Last year, US feedlot operators lost $NZ140 ($US100) a head.

Cow and calf rearers lost $NZ43 ($US30) a head, Ms Voss said.

The market for meat in Europe, the United States and Japan would remain volatile until indicators such as unemployment eased and consumers felt confident enough to start spending again, she said.

Demand for meat would come from China, India, Indonesia and Russia and should start later this year, with the economies of developing nations growing about 4%, but China's expected to grow at 10% this year, she said.

"We think there will be a rise in prices for both sheep meat and beef," she said.

Brazil was expected to become the world's food basket, but Ms Voss said it was coming under closer environmental scrutiny and did not have the animal technology to continue the production growth achieved in the last decade.

While developing markets were seen as having huge potential, Ms Voss said there was a risk they could be volatile.

Recently, Indonesia announced a ban on imports of beef offal to protect its local industry, while China slapped a 105% tariff on chicken imports from the United States in retaliation for the US placing a tariff on Chinese tyre imports.

"Those are the kind of things you might expect to see in these developing markets," she said.

Asked about the future of wool, Ms Voss said the market for medium and fine wool should improve because of declining supplies and increasing demand, but wool would remain a niche product, she said.

"Yes, there will be an improvement, but not the massive surge in prices in the medium term at least," she said.