Tariffs causing uncertainty over demand for beef, milk
New Zealand beef and milk demand was steady over the first quarter of the year but uncertainty looms with the results of export tariffs to the United States and knock-on effects from the flurry of international agreements being negotiated with the Trump administration yet to be factored in to reports.
New Zealand beef production for the first three months of this calendar year hit around the 200,000 tonne mark, a report from agribusiness specialist Rabobank shows.
That was up by 1% on the previous year.
"This uptick defied earlier forecasts predicting a 5% decline in the first three months of the year, with the higher slaughter volumes in the North Island likely influenced by dry on-farm conditions over summer," report co-author RaboResearch senior agricultural analyst Jen Corkran said.
However, RaboResearch is still forecasting a 4% decline in total New Zealand production volumes for the 2025 calendar year, the report said.
"Slaughter numbers nationally from January 1 to late April 2025 are down by 3.3% compared to the same period in 2024," Ms Corkran said.
"We expect slaughter numbers will continue to be lower than 2024 throughout the rest of the year, with production volumes influenced by slaughter weight.
"Beef exports were basically flat for Q1 versus 2024, at close to 129,000 tonnes," Ms Corkran said.
"However, over the same period, the value of beef exports surged by 30% driven by robust demand and a weaker New Zealand dollar."
New Zealand year-on-year export volumes were steady and up 30% by value.
"The United States continues to be a key market, accounting for 51% of export volumes and 46% of total value in Q1, 2025.
"Conversely, exports to China have further declined, with volumes now making up 31% of overall beef exports."
Ms Corkran said the higher export returns were driving record farm-gate prices across all cattle cohorts.
"The April-June export data will be crucial in observing changes in trade flows and values, particularly given the implementation of US tariffs."
RaboResearch says demand is at historic high for imported beef to the US and with New Zealand facing a base 10% tariff, export volumes should remain steady, though consumers would wear additional costs.
Despite that, bigger ramifications could be expected if there is a big change to the US-China trading arrangements.
The results of a number of countries entering into and negotiating trade agreements with the US could also have implications for global trade dynamics, RaboResearch says.
The United Kingdom, China, Japan, South Korea, India, Canada, Mexico, Israel and Italy are just some of the nations already involved in talks.
Meanwhile, geopolitical uncertainty and the "potential for a wider series of outcomes" across the season could also affect milk prices, Fonterra says.
"Therefore, our opening forecast farm-gate milk price for the 2025-26 season of $10.00 per kgMS sits within a wide forecast range of $8.00-$11.00 per kgMS," a statement from Fonterra chief executive Miles Hurrell said.
That forecast puts prices with a range either side of the current season milk price of $10.00 per kgMS.
"We've delivered strong shareholder returns through [the financial year] 2025, including a 22c interim dividend, and as we get closer to the end of the [financial] year, we are focused on maintaining this momentum.
"Our forecast farm-gate milk price for the current season is driven by strong demand for our milk price reference products and our range is unchanged at $9.70-$10.30 with a midpoint of $10.00 per kgMS.
"We're also pleased to tighten our year-end forecast earnings within the existing range, given the strength of our third-quarter performance," Mr Hurrell said.
andrew.ashton@alliedpress.co.nz
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NZ Herald
36 minutes ago
- NZ Herald
Fresh food exporter Peloris sees NZ-China opportunities as US trade tension mounts
Peloris Group, which specialises in exporting fresh food to China, says opportunities are opening up for New Zealand and Australian producers while Sino-US trade relations remain strained. Co-founder Peter Verry says if Australia and New Zealand producers can meet China's quality and supply standards, then they could benefit from the
RNZ News
4 hours ago
- RNZ News
Panic at the Pump
business money 31 minutes ago Experts are warning one of the immediate repercussions of the conflict in Iran could be a spike in fuel prices. Infometrics chief executive Brad Olsen told Morning Report that if the Iranian side responds with attacks on US shipping, quote, "worries about oil supply will increase substantially". But there are things you can do to manage and drive your car in a more efficient way that will save petrol and save money. We thought this would be a great time to get some tips, so I'm joined by Terry Collins, Principal Policy Advisor for AA.
Otago Daily Times
6 hours ago
- Otago Daily Times
Cheese-makers extend winning streak
Fonterra's Clandeboye team has extended its run as the co-op's best cheese-makers for a key market in a five-year streak. The South Canterbury site was singled out for the Greater China Star Quality Cheese Award for the fifth time at Fonterra's annual Best Site Cup awards The award goes to the team producing the highest quality product and best customer service to the co-op's greater China consumer market. Clandeboye cheese and protein manager Conrad Harle said the team's long-standing commitment to quality and customer satisfaction had paid off again. ''The team takes great pride in delivering consistently high-quality cheese to our customers in greater China, ensuring every product meets the highest standards,'' he said in a statement. ''Our very customer-focused approach and strong relationships drive this success, and we are eager to keep raising the bar.' The awards in their 19th year generate friendly competition between co-op sites for the right to win a range of categories including sustainability, innovation and efficiency. Clandeboye has a strong history of manufacturing cheese. The site near Timaru began operating in 1904 and is one of Fonterra's largest cheese production facilities. More than 1000 workers process about 40% of the South Island's milk supply. At the peak of the season, more than 13 million litres of milk is collected daily to be turned into cheddar and mozzarella which is shipped to more than 50 countries including the largest market of China, United States, the Middle East and Africa, South East Asia and Australia. Cheddar is the mainstay product with Clandeboye's oldest manufacturing plant able to process up to 1.8 million litres of milk a day – equal to 200,000 1kg blocks. Cheese making combines pasteurisation, curd cutting, pressing, and ageing with modern automation to produce consistent products and advanced ageing processes. Mozzarella has become a major part of the site's production, with Clandeboye the largest producer of it in the Southern Hemisphere. The cheese ends up in more than half a billion pizzas every year around the globe. Last year Fonterra announced it was replacing polluting coal boilers at the site with a $64 million conversion to wood pellets. Two boilers are due to be completed in September, as part of its commitment to exit coal by 2037.
