Executive Summary
The New Zealand (NZ) beef industry traces its origins back to the first European arrivals to NZ. While cattle were initially used as draught oxen to provide food and for the purpose of improving pastures, they are now a major source of export in come for NZ farmers. Today NZ exports chilled and frozen table and manufacturing beef to the major world markets, with the majority of production going to either the manufacturing market of the United States (US) or high value markets in Asia and Europe.
On-farm, farmers make a decision every year as to what class of livestock they will finish over the following 12 months. The traditional beef system has been to retain castrated male and female calves from beef breeding herds, with stock then finished and sold as ‘Prime’ beef. Since the 1970’s, farmers have developed and maintained the bull beef industry, with male calves retained from the dairy industry for finishing and export, predominantly to the US market. Given that the product from both types of animal are exported to similar markets, the report findings indicate that it is the same external market forces which impact the returns to NZ farmers.
This report explores the major challenges in supplying beef to the world market and the external forces at play. It also investigates the future market outlook for NZ beef, the challenges and opportunities that the beef market faces, and how farmers can best take advantage of these.
The main findings of the report are:
- NZ beef production accounts for approximately 8% of cross-border trade making NZ one of the largest beef traders in the world.
- Approximately 50% of NZ beef production is exported to the US market as both primal cuts and manufacturing type beef, illustrating the reliance of the industry on this major market.
- There is a significant amount of work being undertaken both by industry (Beef & Lamb), Government and processors to expand the market for NZ beef and improve prices paid to farmers for livestock. This includes generic provenance marketing, Free Trade Agreements to achieve better access for NZ beef into high value markets and specialist breed based marketing programmes.
- Farmers elect to farm either Bulls or Prime Heifers & Steers, or a mixture of both. The report findings indicate that farmers are best to farm stock suited to their specific farming operations rather than “farming for the market”.
‘Prime vs. Bull’ : Making more cents out of the Beef Industry – David Kidd
