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.