GOING GONE: Stortford Lodge beef sales have seen record prices for beef cattle. PHOTO/FILE
BEEF IS booming but Tony Thompson's Glen Anthony Simmental Stud is not.
The vet spied the breed while travelling through Europe in the late 1960s and registered his herd in 1973, when beef farmers reigned supreme in New Zealand's farming scene.
It looked to be a choice - Simmentals are quality animals with "a very fast and early growth rate".
"They get tremendous results in terms of carcass quality and carcass growth but the dairy support industries - Friesian bulls, heifer grazing, cattle grazing - they have taken all my clients," the award-winning farmer said.
"I used to sell in the better-quality country because my cattle are too big to go up in the hills and compete with the Angus at the back of Wairoa and Gisborne.
"My cattle aren't suited to hill country - they are better suited to farmers that can feed them well.
"This dairy industry has taken my legs from under me. I'm struggling at the moment."
The struggle is despite record prices. Beef export returns trumped sheep meat for first time in 20 years. For the year to the end of September New Zealand beef and veal exports generated $3.2 billion, up 39 per cent on the previous season.
Industry organisation Beef + Lamb New Zealand chief economist Andrew Burtt said demand was driven by the United States, where frozen New Zealand beef was blended with fresh lean beef and fatty offcuts from feedlot cattle.
"All those things come together to produce something that meets the consumers' needs in the form of a patty or ground beef that you would cook in something like spaghetti Bolognese," he said.
Driving United States demand was drought in several states.
"As a result, particularly in Texas which is the biggest cattle-producing state, they have run down their cow herd."
Farmers were retaining stock to rebuild herds "so there is relatively less supply of lean beef".
"A lot goes into quick-service restaurants and it meets a whole lot of needs they have from a specification perspective. Ground beef, like it or not, is the way Americans eat most of their beef."
Beef + Lamb figures show for the 35 years since records were kept the average value of New Zealand beef exports had not exceeded $6000 per tonne.
Mainly due to strong US demand, New Zealand beef production averaged $7510 per tonne in 2014-15 compared with $5970 for the previous season.
East Coast farm revenue was up 5.5 per cent "and most of that being driven by cattle".
"There is a 15 per cent increase in cattle revenue expected this year. It is about 35 per cent to 40 per cent of total revenue of beef and sheep farms in the East Coast."
High beef prices have serendipitously coincided with a 27 per cent increase in culling of dairy herds due to a slump in milk-product prices.
"We are seeing the first decrease in dairy cattle numbers in 20-plus years."
High beef prices have helped Mr Thompson.
"The beef prices are quite a nice little support for a struggling farmer, because instead of selling my bulls for $5000 or $6000 at bull sales I'm having to cope with $2500 to close-to $3000 at the works.
"It is bloody good money but not what I am aiming for - selling breeding bulls. That is not a possibility at the moment."
The dairy industry was "a monster" that wasn't about to be usurped.
"You can't just change overnight with high beef prices because there are so many Friesian bulls out there - it is virtually impossible for somebody to say, 'Oh gee look, beef prices are up so I will go on into beef'. There aren't the cows around - there is not the breeding stock."
He said farm successions were often when the switch to beef bulls were made because they could be sent off when feed was short and required little labour.
"They are easier farming - just moving shifting from paddock to paddock - and they can handle the winter."
Federated Farmers Hawke's Bay president Will Foley said beef farmers had "an air of confidence".
"I guess they felt like the poor cousins to dairy farmers in the last few years, so there is definitely some renewed optimism in the sector and that would be mainly coming from the beef prices," he said.
He said dairy farmers, looking to other income avenues "could potentially raise a lot of bull cows themselves".
"That is probably going to see a rise in dairy beef numbers going forward the next couple years at least."
Sheep meat was steady "but it is not spectacular so you may see some beef and sheep farmers altering their ratio of beef numbers to sheep numbers".
"Some of that will be taken up with dairy beef but some may swing back to more beef cows ... It is hard to tell, but the time will tell.
"Right now a lot of farmers are wary of the El Nino forecasted. I don't think farmers are perhaps getting the stock up to normal live in levels or what they consider normal."
PGG Wrightson livestock manager Vern Wiggins said beef was enjoying record prices "but it could change at any time", especially if December was dry.
Mr Burtt said the East Coast was ready for a dry summer: "Everyone my team talks to consistently reports that farmers are thinking about it and making adjustments now, or know what they are going to do and when they are going to do it, rather than waiting for it to happen to them."
Mr Foley said the region's farmers had "tons of options".
"In terms of production we have quite a diverse range and it is certainly sheltering us from some of the ups and downs of the other regions ... Hawke's Bay is the place to be at the moment, I reckon."