South American curbs on beef exports bode well for NZ’s prospects

New Zealand’s beef exports may suddenly be  in high demand from  overseas  markets, in   the  wake  of  the world’s largest beef exporter, Brazil, suspending its beef exports to its No. 1 customer, China, after confirming two cases of “atypical” mad cow disease in two separate domestic meat plants.

China and Hong Kong buy more than half of Brazil’s beef exports.   NZ’s  sales are relatively  modest, by comparison, but  reached  36%   of  our total  beef  exports   last  season. 

The  other  big exporter  to  China,  Argentina,  in  June  decided  to   restrict  exports, with the  aim of  boosting domestic  supply.  Argentinian beef exports are to be  limited to 50% of the average monthly volume exported from July to December 2020.

Because  Argentina was the fifth largest beef exporter in 2020 and the second largest supplier to China, its cut in export volumes has the potential to have a significant impact on global beef trade.

NZ   producers  who  were  reported  to be  heading  into spring  with some confidence could  find  prices — which were  already  strong — climbing  even  higher. 

Rabobank,   in  a  recent  report,  says  pricing remained elevated over the past three months. This high pricing comes off the back of strong demand from China and suppressed beef export volumes from Australia,.

The report says Argentina’s restrictions will be reviewed at the end of this month.

Meanwhile   China  is   facing  its  own  problems  through its  poor  job  of  curbing  swine  fever. With  one  of the  world’s   highest rates  of  pork  consumption,  China’s  failure has   wrought  havoc in  its  domestic  supplies,  costing  between $50bn  and $120bn, according  to the Asian  Development  Bank.

If  China   faces  years-long  disruption in  pork  supplies, as  some reports  suggest,  ,  the  outlook for    beef producers, here   and  with other  exporters,   should  shine  even  more  brightly.  

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