Despite the NZ dollar dropping in value by US5c in the last 4 weeks, US beef prices in NZ dollar terms have still declined slightly. Procurement competition continues to run hot in the North Island with companies paying a higher than usual proportion of market returns back to the farmgate. The margin between export value and farmgate price in the North Island is around 9% below the 5yr average level for this time of year, and 33% below last year. In the South Island procurement pressure has just started to heat up with the cow kill now dropping. Company margins in the South Island still above normal but are dropping.
Higher US beef production & stocks
US beef production has been running at high levels with April production up 7% year on year and slaughter up 6%. This has been a significant factor in an increase in beef in cold storage in the US in April. So has relatively sluggish domestic demand for beef. The USDA's latest cold storage report shows that meat in storage in the US has increased 5.4% compared to last April, which included a 3% rise in processing beef in storage. Beef stocks typically decline at this stage of the season but not this year. This will continue to limit US imported beef prices in the short term
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Market Briefs by iFarm.co.nz iFarm the leading source of agri-market prices, information and analysis for NZ farmers. Receive benchmark prices for the works, store and saleyard markets delivered direct to your inbox. Visit www.ifarm.co.nz or call 0508 873 283.
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