NZ on track to fill US beef export quota
Farmers cash in on record prices.
New Zealand may fill its annual beef export quota to the US for the first time in 11 years as farmers cull more stock to cash in on record beef prices amid a US shortage.
Beef exports to the US rose 7.6% to 14,724 tonnes in July, from the same month a year earlier, according to data released by Statistics New Zealand.
That takes US beef export volume for the first seven months of this year to 164,493 tonnes, compared with 141,973 tonnes at the same time last year. It suggests New Zealand may reach its US annual quota of 213,402 tonnes for the first time since 2004.
The ASB beef price index rose 7% over the four weeks to August 14 to a record 305.8, helped by a weaker New Zealand dollar and strong US demand as drought-ridden American farmers rebuild their herds over the next two years.
Should New Zealand hit the quota limit, its US tariff on beef will rise to 26.4% of the export value, from the current rate of 4.4USc per kilogram, says the Meat Industry Association.
That will be likely to prompt meat processors to divert beef to other markets such as Japan, Korea and China, where prices are weaker, analysts say.
"If this rate of growth does continue for the remainder of the year, it's likely that we will fill the quota," ASB Bank rural economist Nathan Penny says.
"Prices may fall or plateau as companies have to divert the beef they have got to other markets. That means current stratospheric prices may give way to merely sky high."
New Zealand beef volumes have increased as dairy farmers cull more cows following a slump in returns for dairy products, and cattle farmers increase stock weights to benefit from higher prices.
The value of New Zealand beef exports to the US jumped 48% to $108.5 million in July, from the year earlier month, according to data compiled by the Meat Industry Association from the latest trade statistics.
The US accounts for 47% of New Zealand beef exports by volume and 44% by value. China is the second-largest market, taking about 20% of exports.
(BusinessDesk)
Tina Morrison
Wed, 26 Aug 2015
Wed, 26 Aug 2015
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NZ on track to fill US beef export quota
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