Varied Impact of Currency Moves on Red Meat Trade

New Zealand meat exports have hit a record high of NZ$5.3 billion in 2013-14.

The exports reached their high levels despite a strong New Zealand dollar because of high average values.

Beef + Lamb New Zealand said it was a positive year for beef, veal, lamb and mutton exports – up NZ$480 million on last season.

North Asia was the largest market region for New Zealand meat exports, accounting for 31 per cent of total returns, while the European Union (EU) and North America remained the primary markets for lamb and beef/veal,.

“The amount of lamb exported was down three per cent, reflecting last season’s smaller lamb crop, but total returns were up 9.5 per cent to NZ$2.52 billion. That’s because the average per tonne value of lamb being exported rose 13 per cent – to NZ$8,300, compared to NZ$7,400 in 2012-13,” said B+LNZ chief economist Andrew Burtt.

While the high New Zealand dollar does not seem to have affected the country’s ability to increase export values and position, for the US competitive exchange rates have had an impact on US exports.

According to market analysts Steve Meyer and Len Steiner, in terms of competition in the global marketplace, the US has lost significant ground to both Brazil and the EU.

The US dollar was up as much as 14 per cent compared to the Brazilian Real but currently is up about nine per cent since July.

Compared to the Euro, the US dollar is currently about seven per cent more expensive than in July and there have been similar gains against the Australian Dollar and Japanese Yen.

“But what does this currency move mean in terms of US trade? First, a strong US dollar tends to support US beef imports as it effectively lowers the price of goods in other markets,” Steiner and |Meyer suggest.

Beef represents by far the largest tonnage of meat protein imported by the US.
So far this year, US beef imports have been about 1.873 billion pounds, 294 million pounds (+18.6 per cent) larger than a year ago. Australia alone has accounted for almost 200 million pounds of the increase.

For Brazil, futures contracts for fed cattle in Brazil traded at BM&FBovespa indicate increasing values for the next three dates.

This is a move that has been expected for this time of the year, because of the off-season peak.

But the official market organisation in Brazil Cepea said that The low supply and high prices for calf and lean cattle are bringing difficulties to the purchase of new batches.