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Outlook for beef very positive

Meat New Zealand says the outlook for New Zealand Beef is very positive, with prices in the key US market up, and New Zealand beef production remaining at near record levels.

Executive Director of the Economic Service, Rob Davison, says beef cattle numbers have been estimated at 4.535 million in New Zealand at 1 July 2003 which is now the third year running of increased numbers.

Davison says, "The beef outlook for 2003-04 is reasonably positive. Beef prices in the key US market are expected to increase in 2004 as US beef production declines." New Zealand exports 215,702 tonnes of beef to the US, worth almost $900 million.

Beef exports were up by 15 per cent overall and the USA and Canada remain the dominant markets for New Zealand.

Davison says prospects for the Asian markets are also looking positive, with shipments up 38 percent.

"This will be important, as New Zealand’s beef production remains high in 2003-04 and demand for New Zealand Beef products remain strong with Australia re-building its herds from the recent drought and also with the US expected to enter a herd rebuilding phase".

Davison says the NZ dollar is expected to average around 61 US cents in 2003-04, up from 55 cents in 2002-03, which is likely to offset slightly higher offshore beef prices.

"The level of the NZ: US dollar exchange rate is a key factor in the New Zealand beef price and we hope it stays at a steady rate".

Davison also noted that beef consumption levels have lifted locally due to lower beef retail prices and said that levels are not expected to drop in 2004.

The South Island now has 26 percent of the total beef herd compared with 21 per cent a decade ago. All regions except Taranaki- Manawatu and Otago showed an increase in beef cattle numbers, and sheep and beef farm conversions to dairy have dropped from 83 farms nationwide last year to just 51 this year.

Land use changes have continued around the country in 2002-03 but were not a significant factor affecting beef cattle numbers. Good pastoral prices and high land values coupled with low timber price estimates reduced the attractiveness of forestry investments.

All categories of beef slaughtering increased with the largest increase recorded in cow and heifers. This increase reflects a return to "normal" culling rates in the dairy industry following the rapid expansion of the dairy herd in recent years as well as a dry summer-autumn for many regions.

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