12 Aug 2015

No concerns about US beef quota

3:23 pm on 12 August 2015

The Meat Industry Association is not worried that New Zealand may reach its quota in the United States later this year, it says.

New Zealand can export 213,000 tonnes of beef to the US - its biggest market - each year. Sixty-nine percent of that quota has already been shipped.

Cows in Rangiwahia, Manawatu.

Cows in Rangiwahia, Manawatu. Photo: RNZ / Alexander Robertson

Prices have been reaching record highs over the past year, mainly because of a drought in the United States.

With low milk prices, dairy farmers have been culling cows and reducing herds to cash in on the high beef prices, with some cows fetching almost $1000 a head.

This has pushed up the amount of beef being sent to the US and there are growing concerns the quota will be met before the end of the year, when bulls are processed in November/December.

Meat Industry Association chief executive Tim Ritchie said it was not too concerning because there were other strong markets for beef.

"The companies are very clearly managing the position and they're not just shipping in the hope it's going to get in, they're actually taking steps to diversify to other high paying markets, and managing their quota utilisation so that we don't end up with a two tier market where some companies might be advantaged and others not.

"There are very clearly other markets that are paying good prices, China is going very well and increases in shipments there have been quite significant over the last 12 months, but normally around two thirds of the quotas is utilised in the first half of the year and that fits in with New Zealand's production profile.

"This year we're slightly more than that, I think it's about 69 percent as at the end of July, and that's primarily caused by the higher dairy cattle kill that's taken place this year."

Mr Ritchie said any excess product towards the end of the year could be stored and cleared against the 2016 quota.

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