Lower AU beef exports a positive for NZ beef industry
skip to content1
Just a heads up, our Online and Mobile Banking Apps will be unavailable between 12:00am and 6:00am on Sunday, 6th December while we make some improvements. We apologise for any inconvenience.

If you are experiencing issues logging in with the Rabobank Online Savings Mobile app on your Apple device, please reset your registration using your digipass.

Please find Rabobank New Zealand COVID-19 update on bank operations for agribusiness clients here.
Rabobank
 

Lower Australian beef exports a positive for NZ beef industry

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.

Blake Holgate, RaboResearch Protein and Sustainability Analyst

Blake Holgate, RaboResearch Protein and Sustainability Analyst

“Forecasts suggest the contraction in economic growth will be worse than the Global Financial Crisis (GFC) of 2009, with large economic declines expected in key markets such as China, the US and Japan.” he said.
 
“As a high-priced protein, beef will feel the impact of any reduction in consumer expenditure. But depending on the market, the product and the sales channel, there will be different outcomes as people trade up or down, and eat in or out.
 
“For example, we would expect to see premium beef products, such as prime steaks, sold through full-service restaurants face a drop in demand as a result of economic contraction. At the other end of the scale, manufacturing beef used for mince and burger patties is not expected to see the same decline.”
 
At the same time, Mr Holgate said, a weaker New Zealand dollar, China’s reduced pork availability due to African swine fever and the US-China trade deal were all additional positive offsetting factors.

 

Rabobank New Zealand is a part of the global Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has nearly 120 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 40 countries, servicing the needs of about 8.6 million clients worldwide through a network of close to 1000 offices and branches. Rabobank New Zealand is one of the country's leading agricultural lenders and a significant provider of business and corporate banking and financial services to the New Zealand food and agribusiness sector. The bank has 32 branches throughout New Zealand.

 

Media contacts:

David Johnston
Marketing & Media Relations Manager
Rabobank New Zealand
Phone: 04 819 2711 or 027 477 8153
Email: david.johnston@rabobank.com


Denise Shaw
Head of Media Relations 
Rabobank Australia & New Zealand 
Phone: +612 8115 2744 or +61 2 439 603 525 
Email: denise.shaw@rabobank.com

 

Privacy Policy
We have to collect some data when you use our website for its functionality and security. We use this data to provide you with a better experience when using our website. For more information, you can refer to our privacy policy here.
OK