21 Dec 2015

Beef prices tipped to remain high

9:15 pm on 21 December 2015

Market analysts at Rabobank are predicting global beef prices will remain high in 2016 as demand outstrips supply.

Beef hanging on hooks in an abbatoir

Photo: 123rf

Rabobank's animal protein analyst Matt Costello said New Zealand beef exporters next year could benefit from tightening supply in Australia.

"Australia's had three years of record slaughter levels driven by this drought that they've had, particularly through Queensland, so from New Zealand's perspective and given Australia is the largest competitor that New Zealand faces in the export market, we're expecting to see a significant decline in volumes processed out of Australia.

"Rabobank's forecasting declining volumes out of Australia around 300,000 tonnes...in 2016 so that bodes well for New Zealand at both the farm gate and export level."

Two weeks ago, New Zealand sold more beef to China than to the United States for the first time and Mr Costello said that could become a trend.

"As we've filled our quota into the United States, domestic US production's been increasing as well, so you're getting record cattle carcass weights, so weak demand out of the US given the over supply in market.

"What processors in New Zealand have had to do is look for alternate markets particularly as the US demand really weakens, so China has been that key market."