New Zealand’s beef farmers will benefit from a significant reduction in Australian beef exports in 2020, with this fall helping to partially offset the impact of decreased global demand due to Covid-19 for the local industry, according to Rabobank animal proteins analyst Blake Holgate.
Speaking following the release of Rabobank’s Australian Beef Cattle Seasonal Outlook – The Battle of the Bulls versus Bears, Mr Holgate said Australian beef exports were expected to fall dramatically in 2020, and this would play into the hands of New Zealand beef producers.
“As a result of historically-low beef inventories and widespread rain buoying local restocking motivation among producers, we anticipate the Australian 2020 beef slaughter will fall by 14 per cent this year and a further two per cent in 2021,” he said.
“Consequently, Australian beef exports are expected to plunge by 17 per cent in 2020 and the change in their slaughter composition – moving from a high to low proportion of females – will further affect the distribution of Australian exports into overseas markets,” he said.
Mr Holgate said a decrease in Australian beef exports was particularly significant for the New Zealand industry given Australia was New Zealand’s major competitor for beef exports in our two largest beef export markets – the US and China.
“Australia’s lower cow kill will mean less competition for New Zealand exports of manufacturing beef in the US where New Zealand and Australia are the dominant suppliers of this product.’ he said.
“The lower kill will also support the New Zealand beef industry’s prospects in China, with reduced Australian beef exports helping mitigate against increasing competition in China from other major beef-producing regions such as South America.
“In the season just gone, the US and China accounted for just over 70 per cent of New Zealand’s beef exports. And the reduced Australian competition into these two key markets will play a key role in holding up New Zealand beef export values in an otherwise disrupted global beef market.”
Global beef demand to come under pressure
While lower Australian beef export volumes will benefit New Zealand exporters, Mr Holgate said overall global demand for beef will come under significant pressure due to the economic impacts of Covid -19.
