Beef export prices to the US have risen sharply over the last 12 months.
New Zealand sheep and beef farmers are riding the crest of a wave as world meat prices hit their highest point ever, while the full impact of US tariffs is yet to make its presence felt.
The United Nations’ Food and Agriculture Organisation (FAO) said its meat price index averaged 128.0 points in August, up 0.7 points (0.6%) from July and 5.9 points (4.9%) from a year ago, marking a new all-time high.
The rise was driven by continuing higher beef and sheepmeat prices, which outweighed largely stable pig meat quotations and lower poultry meat prices, the FAO said.
International beef prices reached a new record high, underpinned by strong demand from the US, which boosted Australian prices, and firm import demand from China, which kept Brazilian export prices firm, despite reduced sales to the US following the imposition of additional tariffs, the FAO said.
Sheepmeat prices rose for the fifth consecutive month, reflecting tight export supplies in Oceania, with higher volumes directed to more lucrative markets, notably the UK and the US.
World pig meat prices remained broadly steady amid balanced global demand and supply conditions.
By contrast, poultry meat quotations declined, pressured by ample exportable supplies from Brazil, the FAO said.
The high export prices for New Zealand meat come at a time when Kiwi consumers are already baulking at the price of meat at the supermarket.
Stats NZ, in its latest food price index data release, said meat was a key contributor to the 5.0% increase in food prices for the year to July.
Beef steak and beef mince prices were up 24.6% and 19.3% respectively over the July year.
The average price of 1kg of beef mince came to $21.97 in July 2025, about $3.50 more than a year ago.
Meat Industry Association (MIA) data show that over the last 12 months, the average value of overall New Zealand beef exports has steadily increased from $9.18/kg in July 2024 to a record $11.20/kg in July this year.
The gain was mostly driven by higher export values into the US, from $10.08/kg last July to $11.73/kg this July.
There has also been a recovery in the average value of exports to China, from $6.84/kg last July to $7.85/kg this July.
It’s been a stronger story for sheepmeat, MIA data show.
Over the last 12 months, the average value of overall sheepmeat exports has increased from $9.87/kg in July 2024 to $13.52/kg in July this year.
The most significant growth has been in exports to the EU, where the average value has gone from $15.96/kg last July to $21.51/kg this July, which is a record for monthly exports to the EU.
The value of exports to the UK has also increased significantly, from $9.86/kg last July to $15.15/kg this July.
There has also been an increase in the value of exports to China over the last 12 months, although it has been more modest than the increase to the EU and UK.
The average value of exports to China has increased from $5.16/kg last July to $6.92/kg this July, MIA data show.
MIA chief executive Sirma Karapeeva said world prices have been driven higher by sheep and beef prices.
“So that’s a real positive because we’re starting to see that flow back on our export receipts and then straight back into the farmgate as well,” she told the Herald.
Karapeeva said strong demand for beef came at a time when many of the big beef producers were rebuilding their herds.
“The US is recovering from drought, Australia is rebuilding its beef herd and Brazil is also repopulating its herd.
“That has kind of constrained or limited the global supply and, together with the high demand, you’re seeing a bump up in prices.”
Another plus for farmers is an export-friendly New Zealand dollar, which traded today at US58.40c.
The US slapped a 15% tariff on all New Zealand exports – meat included – last month, up from a widely expected 10% impost.
Karapeeva said it was still unclear how the impact of tariffs would pan out.
More would be known once the next set of trade data for August came out, she said.
The question facing exporters is who actually ends up wearing the 15% – US consumers, importers, exporters or a combination of all three.
“I think it’ll be a mix of all those three things and it really does come down to the commercial contracts that processors negotiate with the importers offshore.
“I can’t give you a definitive answer on that.
“I think ultimately the consumer will see an uptick in price because somewhere along the line that additional cost will be passed on.“
While world prices are looking much stronger, Karapeeva said local stock numbers were in decline because of land-use change, afforestation and a range of other issues.
“I think farm profits are starting to recover, which is very positive.
“On the flipside, processors are doing the hard work at the moment trying to keep their head above water with all the changes and all the challenges, and the geopolitics that is affecting global trade.”
Cash-strapped Alliance Group, New Zealand’s biggest sheepmeat exporter, is in the throes of a deal with Europe’s Dawn Meats that will see Dawn take a 65% stake in the company, freeing up $200 million for debt repayment.
The deal is subject to shareholder acceptances, High Court and regulatory approvals.
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.