NZ plugging into beef shortage
High exchange rates mean New Zealand is not making the most of record prices for beef in the United States.
Hamburger meat is selling at US$2.20 a pound (NZ$5.90 a kilogram), 10 per cent up on a year ago, and the highest it has ever been.
The rise shows no sign of easing off, according to Beef + Lamb New Zealand.
‘‘It’s got some pretty good legs,’’ general manager market development Craig Finch said.
‘‘It’s in unknown territory. The US market has never been at this level before.’’
But with the kiwi at US82C and with a prediction that it could go as high as 88c, farmers were not receiving full value for their stock.
The US beef herd had fallen to its lowest numbers since 1953 and with high grain prices and a sluggish economy was unlikely to recover quickly.
This void in beef supply would be filled by New Zealand, Finch said. The local beef herd was expected to increase 2.5 per cent this year and more dairy beef could be expected from the growing dairy industry.
A shortage of beef worldwide meant the Russian market would also have an influence. Paraguay, a big supplier to Russia, had been removed because of a foot and mouth disease outbreak.
‘‘We think the Australians will focus on filling that gap in the market at the expense of the US. That has to be useful for us.’’
However, Finch was cautious about predicting how long the high prices and market opportunities would last.
‘‘There’s so many forces in the world today, weak currencies in Europe and the US, visibles and invisibles, that getting your head around it all is hopeless. Trying to predict it is even worse.’’
New Zealand’s top quality beef cuts went to Asia and Finch said that market was also looking promising.
New Zealand had worked hard to hold on to gains made since 2003, when the US was forced to withdraw over bovine spongiform encephalopathy (BSE) disease fears.
The US had returned to Japan but with strict conditions, to Korea with a new free trade agreement, and to Taiwan, where it faced stiff opposition from local farmers.
However, it was Australia, whose grain-fed beef was similar in taste and appearance to US beef, that had lost a lot of ground with the US return. New Zealand had tailored promotion of its grass-fed beef in each of these markets.
In Japan, food safety was important. In Korea New Zealand’s natural beauty was promoted, and in Taiwan the health attributes – omegas 3 and 6 fatty acids and low calories – were highlighted.
Taiwan had now grown to be New Zealand’s biggest prime cut market.
The Taiwan trade was now worth more than US$112 million (NZ$136M), not far below 2004’s US$116M (NZ$140M) when New Zealand had 52 per cent of the market in the US absence, Finch said.
This had been achieved through convincing chefs in blind tastings that though grass-fed beef might look different to the pinker grain-fed beef, its taste was superior. Fairfax NZ