Beef prices continue to set records

Beef exports in September jumped by 24 per cent year-on-year. Photo / Christine Cornege

Global dairy markets have plummeted but New Zealand beef prices have continued to hit record highs, while sheepmeat prices have stayed firm, Rabobank says in its latest monthly commodities report.

The rural lending specialist said low dairy prices had provided some incentive for international buyers to return to the market to rebuild inventories but it said prices - which have dropped by almost 50 per cent since February - would take months to recover.

"Global production from the main exporters remains in positive territory and is supported by above average trends in the Northern Hemisphere," Rabobank said. "Also China has yet to return to the market in a meaningful way as the market works its way through accumulated stocks."

Fonterra has forecast a farmgate milk price of $5.30 per kg of milksolids for 2014/15 but most market economists expect the co-operative to revise its forecast down to sub $5.00 levels when it updates farmers next month.

While there was cause for concern about dairy, Rabobank said beef prices were enjoying a stellar run.

Farmgate prices for all beef categories continued the upwards trend during October and into November. North Island bull prices late this month averaged 550c/kg - 37 per cent higher than the same week last year - and the highest on record.

At the end of the New Zealand processing season, which finished in September, total cattle slaughter increased by 2 per cent year-on-year or just under 435,000 head to a total of 2.33 million.

Beef exports in September jumped by 24 per cent year-on-year, to 20,937 tonnes, with exports to the US up by 15 per cent.

In the New Zealand sheepmeat trade, farmgate prices had a strong rise in October into November, while continuing to track higher than last year's price for the same period.

North Island prices are the highest since February 2012, averaging 633c/kg last week.

Meaty report
*Dairy: Global dairy markets are showing signs of reaching a bottom, but production here and around the world remains high.
*Beef: Beef prices go from strength to strength, with North Island hitting a record 550c a kg, up 37 per cent on last year.
*Sheepmeat: Farmgate prices strong in October-November. Lamb kill down 3 per cent, year on year, to 20.3 million.