Beef and veal exports up as prices firm

Record prices at a sale at Stortford Lodge three years ago. But what is the future for sheep in Hawke's Bay?

The changing shape of the Hawke's Bay pastoral landscape has been highlighted again this week with confirmation of continued growth in beef and veal exports, and declines in lamb and mutton exports.

According to lamb, mutton and beef statistics compiled by Beef + Lamb, beef and veal exports for the December quarter were a record 78,000 tonnes, a 14.4 per cent increase on the 2013 December quarter.

Lamb exports, however, were down 6.2 per cent to 57,500 tonnes, and mutton down 4.4 per cent to 17,200 tonnes, figures which follow data showing the nationwide sheep population has dropped below 30 million compared with the 70-million highs of the 1980s.

The good news is that the value of red meat is increasing, the beef and veal exports rising 47.9 per cent to a record $599 million, and lamb exports, despite the lesser volume, increasing by 2 per cent.

The value of beef and veal per tonne rose 29 per cent to $7670 per tonne, lamb by 8.7 per cent to $9140 per tonne, and mutton by $3.5 per cent to $5420 per tonne.

It is significant that the decline in lamb exports comes as Australian lamb exports reach a record, latest figures putting exports in November at 19,088, the total for the year expected to be well over 220,000 tonnes.

Beef + Lamb says the record beef and veal exports reflect record high international beef prices, driven by a beef shortage in the US and high slaughter numbers in New Zealand due to lowering dairy prices.

The extra beef exported went mainly to North America, which received 58 per cent of the total beef and veal export in the first quarter of the 2014-2015 season.

North America was the only destination to see an increase in New Zealand lamb volumes, while North Asia accounted for 68 per cent of the mutton exports, albeit down from 77 per cent from the first quarter of the previous season.

As a result, there was a surge in exports of mutton to South Asia, North America, and the European Union.

While the increasing prevalence of cattle, including dairying, poses challenges for Hawke's Bay's traditional pastoral farming sector, Beef + Lamb chief economist Andrew Burt notes 80 per cent of pastoral land nationwide remains in sheep and beef drystock farming.

Federated Farmers Hawke's Bay provincial president Will Foley says higher average prices have brought some confidence of a sheep farming revival, although some of the infrastructure and capacity might not be there to handle anything too dramatic.

In relation to the current export position, he said that with some farmers having held lambs back second-quarter figures could be different.