New Zealand's meat exports to the United States surged 60% in the second quarter of 2023, driven by a significant reduction in the American cattle herd. The value of total meat shipments reached NZ$3.9 billion (US$2.3 billion), a 36% increase compared to the same period last year, according to Statistics New Zealand.
Key Details
Sales to the US, the largest market for New Zealand's red meat, accounted for NZ$1.36 billion of this total. The increase comes as the US faces its smallest cattle herd in 75 years, leading to rising retail prices, with ground beef hitting record levels in May. The situation has been exacerbated by an outbreak of the New World screwworm parasite, which has been confirmed in about 20 cases among the US cattle population of 86 million, threatening to disrupt animal transport and further impact beef supply.
Background
The shortage of beef in the US has contributed to rising global prices, benefiting New Zealand farmers. According to ANZ Bank, beef prices in New Zealand increased by 24% in June compared to the previous year. New Zealand's beef, known for its lean meat trimmings, complements the US production of fat trimmings, which are essential for ground beef used in hamburgers. Additionally, the US market is expanding for New Zealand lamb and sheep meat, although an investigation into import levels was initiated by the US administration this month following concerns from American farmers.
The surge in New Zealand meat exports is likely to benefit the agricultural sector in New Zealand while contributing to higher beef prices globally. The ongoing challenges in the US cattle market could lead to increased demand for New Zealand beef, further impacting pricing dynamics in the meat sector.
Investors will watch for developments regarding the New World screwworm outbreak and its potential impact on US cattle production.