11 Aug 2015

Beef exporters fear looming US quota

5:55 pm on 11 August 2015

New Zealand beef exporters have growing concerns that they're going to hit the quota limit for shipments to the biggest market, the United States.

Beef carcasses

Photo: 123RF

Each year New Zealand can export 213,000 tonnes of beef to the US, and as of the end of July, more than 147,000 tonnes had been sent.

Half of the country's beef goes to the US where it has been reaching record high prices because of strong demand.

AgriHQ's analyst Nick Handley said if the quota was reached, beef would have to go to other countries for lower prices.

"Here in New Zealand all the discussion has been about our US beef quota over the past couple of weeks.

"We were always going to push close to it this year, but the continued elevated cow slaughter through winter has meant that it's all but guaranteed that we will hit our quota this year.

"While far below peak season levels, this increase has been enough to get exporters concerned. Many processors will hit their US allocations long before the end of the year if they don't respond.

"Already we're seeing exporters starting to be more selective in the cuts they're supplying to the US - any cut that can be sold to another market for a similar price, or at least at a small discount, it's being diverted away.

"With US prices this high this year the stakes are high. It does mean that if you're a processor, if you can still have some US quota left later in the year you're at an advantage over other New Zealand processors who may have run out of quota.

"That's what I guess each company is trying to avoid - not being that one company that doesn't have access to the highest paying market come the end of the year when the bulls start coming in."

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