The Beef + Lamb New Zealand’s (B+LNZ) New Season Outlook 2019-20 forecasts beef, lamb and mutton prices to lift, helped by continuing strong export demand and an expected weakening of the New Zealand dollar.
According to the report, beef and veal exports are expected to be up 5.9% to $4.17bn and sheep meat up by 4.9% to $4.23bn.
“We have forecast increases in farm-gate prices for beef, lamb and mutton in 2019-20, because small increases in in-market prices are expected to be further assisted by an easing of the New Zealand dollar,” said B+LNZ chief economist Andrew Burtt.
Strong Chinese import demand for mutton and value cuts from lamb continues since strong growth began midway in the 2016-17 season.
Although African Swine Fever (ASF) has had an effect on the global meat market, New Zealand’s growth in the export value of red meat and volume began before the Chinese ASF epidemic.
“The growth in China’s red meat import demand is built on genuine demand growth as consumption has out-paced domestic production growth,” said Burtt. “They are the end consumer, not the manufacturer of raw product to supply other markets.”
The report believes that ASF in China is most likely to benefit New Zealand’s beef processing cuts, which are a more apparent substitute for pork in the cotrunrey. Sheepmeat and other beef cuts are generally in the premium segment of the Chinese animal protein market.
New Zealand’s beef and dairy cattle herds are also expected to be remain relatively steady and will lift total export production by 2.0 percent, largely due to a lift in steers and heifers processed.
Burtt says that while there is uncertainty surrounding international trade and the threat of a slowdown – chiefly in some of New Zealand’s major markets – New Zealand’s sheepmeat and beef exports are grounded in solid demand from large economies. The production outlook and contribution to New Zealand’s economy by the sheep and beef sector remains positive.