US demand for beef set to remain high

UNITED STATES demand for New Zealand beef will not let up for three or four years, Rabobank says.

After a drought in 2011, numbers fell to 29 million cows in 2014, the lowest since the end of World War II.

As a result, beef prices for New Zealand farmers have risen to record highs. Last month the Beef Index rose 13 per cent, assisted by a lower dollar. About 50 per cent of exports are destined for the US.

‘‘The prices New Zealand farmers have been getting for their beef are even more impressive, given that Australian cattle supplies have been extremely high over the past two to three years,’’ Rabobank’s Matt Costello said.

‘‘While we expect a US rebuilding effort over the short to medium term, we also expect a significant shortage of beef out of Australia because of drought.

‘‘If you take away the key competitor to New Zealand exports, which is Australia, and you see a significant reduction in cattle out of that market, that bodes very well for the New Zealand industry.’’

(Price index) A Rabobank report predicts the US cow herd will relocate into two regions: one, the southwest and high plains, the second in newly developed capacity in the central US – mainly in the Dakotas and into the Corn Belt.

The report says the herd should grow by a total of 3.5 to four million head, and of that total 1.7m will come from the new areas.

Both top quality beef cattle and dairy cull cows are sent to the US to be blended with US grain-fed animals to make burger patties.