New Zealand farmers aren't seeing the full benefit of rising beef prices in the United States, their largest market for the meat, because the stronger kiwi dollar is crimping returns, according to AgriHQ.
The price for 95CL imported bull beef was recently at $US2.25 a pound ($NZ6.70/kg), up from $US2.14/pound last month, $US2.23/pound a year ago and ahead of the $US2.20/pound five-year average, according to AgriHQ data.
"US imported beef prices are lifting in response to the lack of beef coming out of NZ and Australia," AgriHQ analyst Reece Brick said in his monthly Sheep Beef report for February. Still, he said the surging value of the kiwi dollar against its US counterpart had gnawed into margins.
"From a NZ exporter's perspective the NZD:USD is still a nuisance which is chewing into their export returns, having now hung in the US$0.72-0.74 range for more than a month."
Mr Brick noted that imported 95CL was making NZ$6.78/kg last week, but if the NZD:USD had stayed flat from late-November/early-December it would be at NZ$7.21/kg.
The kiwi dollar has strengthened through December and January almost entirely due to US dollar weakness.
The US is New Zealand's largest market for beef, taking 191,075 tonnes, or 47 per cent of New Zealand beef exports, in the 2017 calendar year, worth $1.25 billion, according to figures compiled by the Meat Industry Association of New Zealand.
Mr Brick said US buyers were initially slow to react to news that the New Zealand cattle slaughter had begun to stall as improved feed conditions prompted farmers to hold onto their stock, but successive weeks of low offerings on the spot market changed the tone, and prices had risen for five weeks in a row.
Also helping bolster the price for imported beef in the US was weaker supply from Australia.
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