Weaker NZ Dollar Insufficient to Offset Lower International Beef Prices

NEW ZEALAND - The first half of the 2015–16 meat export season ended on 31 March 2016 and analysis by Beef + Lamb New Zealand's Economic Service shows that red meat (including beef, veal, lamb and mutton) export revenue is down, despite increased shipments and some depreciation of the New Zealand dollar (NZD).
calendar icon 18 April 2016
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Beef: Strong sales to North Asia continue

Compared to the same period last season, New Zealand beef and veal shipments were down 3.7 per cent in the first six months of the 2015-16 season.

This was despite being up 15 per cent in the first three months. Chilled export volumes remained unchanged, with all the decrease due to lower frozen shipments.

The average value in NZD (New Zealand dollars) of chilled beef exports was up 11 per cent in the first half of the season, while frozen beef exports averaged 4.3 per cent less than the same period last season.

It is important to note that these variations include the gains from a softer NZD. When looking at the exports traded in USD (the most common currency in which New Zealand beef is exported), the average value expressed in USD was down 3.9 per cent for chilled New Zealand beef and 18 per cent for frozen.

This highlights that average values in NZD would have been down considerably more on the previous season, without the NZD depreciation.

The volume of exports to North America – the largest destination for New Zealand beef and veal exports – was down 15 per cent in the first half of the season, with the majority of this decrease occurring over January to March 2016.

After a tremendous 55 per cent increase in shipments to North Asia in the first quarter of the season, exports continued to increase, but at a much lower rate in the second quarter (+5.5 per cent).

Overall, in the first six months of the season, exports to North Asia were up 24 per cent on the same period last season. The majority of this increase was to China and, to a lesser extent, Taiwan. Exports to Japan were down.

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