There are signs the cattle sector will be make a good recovery from the drought that affected most of New Zealand for the first half of 2013 which is expected to reduce slaughter numbers by 1.5percent to 4.1 million head in 2014. Total cattle stocks are forecast to reach 10.24m head driven by the burgeoning dairy herd.
Total beef production in 2014 is forecast at 618,000 metric tons (MT) carcass weight equivalent (CWE), only 1percent less than the drought boosted 2013 volume. It is expected that average carcass weights will be up marginally by 0.3percent. Given a normal pasture growing year these weights could quite easily be exceeded.
The beef production and processing industry in New Zealand is becoming increasingly reliant on the dairy sector which now probably contributes directly or indirectly 70-80percent of the total kill.
As a result of the drought slaughter numbers were significantly higher than anticipated in the first half of 2013 and it is now estimated the total annual kill for 2013 will be 4.17m head. This is 2.6percent greater than previously forecast and has been driven mostly by increases to the adult cattle (excluding cow) kill. The increased 2013 slaughter has translated to higher beef production now estimated at 625,000 MT which is similarly ahead of previous forecasts by 2.6percent.
Domestic consumption is stable with variations in production taken up by fluctuations in exports so it is likely that for 2014 exports will be slightly less (1.5percent) than 2013 at 514,000MT CWE.
The export tonnage for 2013 is now estimated at 522,000MT CWE an increaseof 3.4percent from the previous forecast totally driven by the drought induced increase in slaughter numbers.At the halfway mark for 2013 exports to the US were 9,800MT CWE, or 7percent, ahead of the same point in 2012. It is expected that most of this gain will be maintained and for the year 245,000MT CWE will be shipped to the US. Even though prices in the US are expected to rise going into 2014 it is forecast that total shipments will be stable at 245,000MT CWE.
Among all other export destinations China is the big mover. For the first half of the 2013 year exports have reached 36,400 MT CWE which is two and half times the whole total for 2012 and it is now forecast exports for the full year will be in the order of 49,000MT CWE.This meteoric increase hasn’t come without some growing pains in the form of market access issues. In March and April 2013 product was delayed at Chinese ports because of a documentation issue which took over a month to resolve. At the end of June over a third of New Zealand beef packing facilities were still not approved by the Chinese authorities for export to China.
