Credit: Original article can be found here
ROBYN EDIE
The price of red meat might increase soon because of demand from the US.
The price of red meat is tipped to increase next year partly because of massive demand from the United States, a Rabobank report says.
Agricultural analyst at Rabobank Genevieve Steven said US beef production was dipping and the country needed to import meat to fill its fridges.
Although this was good news for New Zealand beef farmers who would have a ready export market next year, Kiwi shoppers could expect high meat prices to continue or increase.
Stats NZ said in October the price of meat, poultry and fish was up 17% compared with last year. Overall food prices had risen 10% for the same period.
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Countdown was selling 500g of beef mince for $8.90 on Tuesday. Premium mince cost $13 for the same weight. Rump steak cost $27.50 per kilogram and First Lite Wagyu mince cost $11.90 for 400g.
Stats NZ data showed that in 2018 1kg of porterhouse steak cost about $29, compared with about $34 this year. Beef mince had increased from $14 to about $18 in that time.
Steven said New Zealand exported 98% of its beef and the US was its second-largest market after China.
The US had a potential shortage of up to 500,000 tonnes of beef in its market, she said.
Lean meat trimmings were exported to the US and mixed with higher-fat meat trimmings from US cattle to produce mince and burger patties, Steven said.
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Rabobank analyst Genevieve Steven says a huge gap in the US market could be filled by local farmers but local consumers would see high prices for meat.
To save money, shoppers could opt for mince or lower-value cuts, or chicken, pork, or even chickpeas as a meat alternative, Steven said.
The meat shortage in the US was so big that along with New Zealand, other meat exporters like Canada, Mexico and Australia could not fill it, Steven said.
“No-one can just pull a lever and send more beef,” she said.
New Zealand farmers could fill some of the demand because there was less demand from China for beef at the moment, she said.
A Meat Industry Association spokesperson said New Zealand exported 161,648 tonnes of beef, worth $1.33 billion, to the US last year.
This year 104,045 tonnes, worth $1.1b, had been sent, he said.
A Rabobank report found the US cattle herd had shrunk since its peak in 2019.
Animal protein analyst at Rabobank Angus Gidley-Baird said the decline had not yet affected US beef supply for consumers.
The bank forecast a tipping point next year, when the US herd would be too small to supply the US home market.
Drought conditions and high feed costs had forced US farmers to breed fewer animals, Gidley-Baird said.
Gidley-Baird said New Zealand beef production was forecast to decline by 4% between 2023 and 2025.
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Aaron Beck, a Stats NZ senior manager for pricing, social and population insights, explains the food price index.
That meant consumers would end up paying more for beef, he said.
New Zealand’s total beef kill for the 2022 season was 5% lower than last year, with fewer steers, heifers and cows processed.
Ongoing delays had contributed to the lower slaughter numbers, with labour shortages and unfavourable weather conditions the main contributing factors, Steven said.