Beef returns beats sheep - 1st time in 20 years

The dairy sub-index plunged 23.1 per cent to its lowest level for 11 years. Photo / File

Returns from New Zealand beef exports hit a record high in the 2014/5 export season, surpassing sheepmeat returns for the first time in 20 years, Beef and Lamb NZ said.

The farmer-owned industry organisation, in an analysis of the export season ended September 30, said sheepmeat returns had been constrained by supply over the year.

Beef and veal exports generated $3.2 billion in export returns, up 39 per cent compared with the previous season. This reflected a 10 per increase in shipments and a 26 per cent increase in average price.

Driven by high beef prices, mainly due to strong US demand and low dairy prices, New Zealand beef production increased significantly in 2014-15, Beef and Lamb said.

Beef exports averaged $7,510 per tonne in 2014-15 compared with $5,970 in the previous season. In the 35 years since records have been kept, the average value of New Zealand beef exports has not exceeded $6,000 per tonne, Beef and Lamb said.

Demand was particularly strong in North America and North Asia, where exports increased by 22 per cent and 7 per cent, respectively, while shipments to every other region declined.
The two largest export markets were the US and China.

"While the US has traditionally been the largest market for New Zealand beef exports, China became the country's second largest market three years ago," Beef and Lamb said.

Despite an increase in lamb production in the 2014-15 season, New Zealand lamb exports were down 2.0 per cent. However, this was offset by a rise in the average value of lamb exports, up 3.4 per cent.

New Zealand lamb export returns reached $2.6 billion in 2014-15, up 1.3 per cent on the previous season. In 2014-15, half of the returns were achieved in the EU, while North Asia, the second largest export region, accounted for 21 per cent of lamb export returns.

After doubling over the previous five years, New Zealand lamb shipments to North Asia fell by 12 per cent in the year, mainly due to product being exported to other markets.

While 2014-15 New Zealand mutton shipments were down on 2013-14 - dropping 8.8 per cent to 85,300 tonnes shipped weight - the shipments were still 13 per cent higher than the five-year average. The combination of lower shipments and no change in the average value resulted in mutton export returns dropping 9 per cent to $445m in 2014-15.

After two years of tremendous growth in mutton exports to North Asia, shipments to the region fell by 23 per cent in 2014-15. This was due to a drop in export volumes of mutton carcasses, which accounted for 22 per cent of mutton shipments to North Asia, down from 41 per cent in 2013-14, Beef and Lamb said.