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USDA GAIN: Livestock and Products


20 March 2012

USDA GAIN: NZ Cattle & Beef Semi-Annual ReportUSDA GAIN: NZ Cattle & Beef Semi-Annual Report

Excellent pasture growing conditions from October 2011 through March 2012 meant cattle stayed on farm in Q4, 2011, which should boost the 2012 total slaughter to 4.137 million head. This coupled with higher average carcass weights should see total beef production boosted by 6.5% to 652,000 Tons in 2012

USDA GAIN: Livestock and Products

Executive Summary

2012

The total kill for the marketing year 2012, which is the calendar year, is now forecast at 4.137 million head, up 6% on the previous forecast completed in September 2011. The factors which have driven the change are:

The adult cattle kill in the December 2011 quarter was 20% behind the December 2010 quarter which wasn’t expected. The excellent pasture feed levels over most of the country made it possible for farmers to carry more stock into the summer months to control pastures and add extra carcass weight. Nationally this will result in stock which normally would have been killed in Q4, 2011 having their slaughter dates pushed forward into Q1 or Q2 in 2012.

The cow kill is expected to be boosted this year as kill numbers become more aligned with the larger beef and dairy cow herd. With a total reproductive cow herd now standing at just on 5.9 million head close to 1 million cows could be culled each year in a status quo situation. It is anticipated that the total cow herd will grow by year end by another 80-90,000 head with 70- 80,000 head being dairy cows which will stock an additional 80-120 new dairy farms for 2012. The forecast cow kill has been estimated from the potential kill less the anticipated retentions which gives the forecast number of 910,000 head.

Quarter four 2012 is expected to provide 500,000 head of adult stock (including cows) for slaughter which will be 70,000 head more than Q4, 2011. In addition the calf kill is anticipated to increase marginally (1%) from 2011 but by 4% from the previous forecast. This forecast is based on 2011’s substantially increased kill becoming more of a benchmark level and with the extra dairy cows calving in 2012 there should be some extra calves to go to slaughter.

Overall beef production for 2012 is forecast at 652,000T which will be a 6.5% increase on the previous forecast due to: firstly, the additional slaughter numbers; and secondly average carcass weights rising as a result of the well above average pasture growth rates over late Q4, 2011 and Q1, 2012 allowing cattle to be fed more and for longer. Not only will cattle slaughtered in Q1 and Q2, 2012 benefit from this but cattle destined for slaughter in Q4 will go into the winter (late Q2 through Q3) heavier.

Domestic consumption in 2012 is estimated at 120,000 tons carcass weight equivalent (CWE). This should mean that there will be 544,000 T CWE available for export which would be an 8% improvement on the initial forecast for 2012, and the previous year’s performance. While prices for imported manufacturing beef in the US are at all time highs the NZ currency is riding high against the USD. Exporters can sometimes find markets for manufacturing beef elsewhere in the Pacific which return more in NZD. Post is expecting exports to the US to be relatively stable at 215,000 T CWE. Although with an expected higher cow kill and slightly increased bull meat tonnage it is likely the risk is to an upside swing for exports to the US.

2011

Now that 2011 is history the final tallies for actual slaughter numbers are in which show total slaughter numbers reaching 3.939 million head. This was just under 1% higher than the September 2011 estimate. A far larger calf kill than had been anticipated (+93,000 head) was offset partially by a reduced adult cattle kill. The increased calf kill resulted from a greater natural increase number form the larger cow herd and better prices being offered. As indicated in the 2012 narrative very good feed conditions over Q4, 2011 meant farmers held onto stock to control pastures and add extra weight which resulted in the lower than expected Q4, 2011 slaughter numbers.

Total beef production came in at 601,000 T CWE just 9,000 T less than expected. It would appear that the relative expense of beef prices in the supermarkets coupled with consumers still feeling the effects of the economic downturn has taken the edge off domestic consumption which is estimated at 110,000 T CWE. This allowed total exports for 2011 to reach 503,000T CWE, 2000T CWE ahead of the September, 2011 estimate.

Exports to the US were just ahead of previous estimates at 213,000T CWE.

Looking Ahead

Preliminary forecasts would put the 2013 year at having a similar level of export tonnage to the 2012 year.

March 2012

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