The North Island cattle kill dipped a further 16% week on week. Dry conditions have meant the kill peaked earlier and higher than usual. Meat companies are reducing capacity fairly quickly and are keen to fill as many hooks as they can in the meantime. It's a different story in the South Island as kill rates there are still on the up with cull dairy cows now coming out in force. The cow kill in the south lifted 20% week on week and is now 50% higher than 5yr average levels for this time. There is less competition to fill capacity as a result and prices there continue to hold steady. The rampant NZ dollar is cutting into overseas market returns at present and is acting to limit both meat company and farmgate returns. If the dollar stays at high levels, the industry will need to lower their sights on expected returns through the autumn and winter. Meanwhile US imported beef prices continue to hold despite limited trading and subdued consumer demand.

US beef numbers may still be falling

The severe US weather conditions are again taking their toll on the US beef herd with indications further liquidation is occurring as a result of the prolonged winter and drought. This will hamper US beef supply in the years to come and will likely boost the need for imported product. Beef cow slaughter is only 6% behind 2012 levels so far this year and according to experts it needs to be double that figure to suggest herd stabilisation. To add insult to injury, drought stress over the past two years is seeing reduced reproductive performance and dry cows are being ousted in the face of limited feed supplies. Storms have added to calf losses and cold weather in the central and northern plains has exhausted hay supplies and is also forcing more cattle to kill.