Tuesday, 04 August 2015 11:11

Low dollar beefs returns

Written by 
Beef + Lamb NZ chief executive Scott Champion. Beef + Lamb NZ chief executive Scott Champion.

The weak NZ dollar is providing an unexpected windfall for the country’s sheep and beef farmers.

Beef + Lamb NZ chief executive Scott Champion says the weak dollar benefits the farmgate price significantly, a 10% depreciation of the NZ$ equating to a theoretical 14-18% increase in price.  

But Champion warns there are downsides to the weaker dollar – imported machinery, fuel and fertiliser costs farmers more.

Meanwhile, the latest BLNZ statistics show that the weak NZ$, high NZ beef production and strong demand for beef have resulted in a 37% rise in beef and veal export revenue in the first nine months of the current season vs the previous season. 

BLNZ says dry conditions early in the summer and low milk prices led to an earlier and extended dairy cow cull than in previous years. From October 2014 to June 2015, NZ beef and veal exports reached 340,430 tonnes shipped weight – up 8.8% on the same period last season.  

The strongest demand for NZ beef and veal in 2014-15 came from the US, which took 57% of total shipments, and China which took 12%. Export tonnages to the US and China increased by 23% and 38% respectively. 

For the first time, beef and veal exports to China overtook mutton exports in volume.

Despite more lambs being processed, NZ lamb exports decreased 4% to 237,780t in the nine months to June 2015 vs the same period in the previous season. This was led by a fall in demand from China where lamb exports fell 12% in the first nine months of the current season vs the previous season. 

Lamb exports to the European Union were up 4.7%. This reflected higher tonnages to Germany, Netherlands and Belgium, offset by lower exports to Britain – still the largest market for NZ lamb.

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