Gloomy picture of beef market

Press, 27 March 1981, Page 3

Gloomy picture of beef market

In two addresses in Christchurch this week, members of the Meat Board had .sad stories to relate about the market for beef.

--’in a paper, which was presented for him, the chairman of the'Meat Board, Mr A..M. Begg, said that at present New Zealand’s beef export industry was in a serious and sorry state with depressed prices in spite of greatly reduced cattle numbers and killings. Not long ago the market was paying almost $1.50 a pound c.i.f. for all the manufacturing beef that New Zealand could supply, but now it

was finding it hard to pay $l.lO, Mr Begg said. “One must say that in recent months the expert fore-

casters of the American market have been consistent—they have been consistently wrong. There have been no long-term increases in prices. “Prices have been too long in the depths for the situation to be regarded as an : aberration or a market quirk that is unlikely to be repeated. The most disturbing ' aspect is the size of the

fluctuations and the inability of anyone involved in the trade to make commercial judgments with confidence.” Mr Begg said that political, economic, commercial, and consumer changes were occurring at such a rate that where there had been reason- : able market stability around the world, there was now uncertainly. Market predicta-

bility had probably gone for ever, replaced by volatility, especially in the perishable food trades, including meat. Beef marketing faced growing problems related to political controls on access and pricing and challenges for consumer preference.

[ In the United States in 1979, beef consumption had fallen by skg a head, which was almost as much as New Zealand and Australia’s total exports combined. Restaurants throughout the world were attempting to hold prices by restricting the size of the steaks they served. A contraction of a kilogram a head in the United States’ consumption equalled 220,000 tonnes.

Speaking to farmers at a field day held in association with the combined Canterbury and Methven Agricultural and Pastoral Associations' beef competitions, Mr M. R. Barnett, a member of the board said that beef might not be so basic to American society as might be imagined.

The United States consumer had reduced the consumption of beef from about 60kg a head in 1976 to just under 50kg in 1979 and replaced this with pig meat, which had increased from 27kg to 32kg, and poultry from 24kg to 28kg.' The problems of the market were : being accentuated by the reasonably severe and somewhat prolonged recession gripping Western economies, including the United States, and all the factors affecting the beef market, except perhaps beef supplies were against an immediate market recovery, Mr Barnett said.

However, the possibility of beef prices rising again in the coming year was not as remote as people might think. Some farmers might think that they should get out of beef altogether, Mr Barnett said. Over the last 20 years, returns to the farmer from beef compared with sheep had been better in only two years.

But under . methods of farming in New Zealand, where pasture use was the: key to farmers’ comparative; advantage, a mixture of cattlef and sheep on much of the I land was essential to maximi-: sing production and income..* Farmers also had to guard against placing too much de-i pendence on one enterprise. ' If it was accepted that! cattle had a role then it was; necessary to strive to obtain I the best return possible, so greater attention had to be paid to increasing the: efficiency of cattle produc-? tion.