Farmers are becoming uneasy about mediocre beef prices, as culled cows from United States dairy herds flood the valuable hamburger trade reports Stuff. Prices have dropped about $100 a head for a good steer from their peak a year ago. Fed Farmers Meat & Fibre chairman Bruce Wills said beef had been a solid performer over recent years, but returns had tailed off lately. He said the culling of dairy herds in the US was filling the manufacturing-beef market and the commodity product was susceptible to currency movements, particularly the US dollar."We have a schedule price of about $3.85 a kilogram and most farmers would be getting $100 less for a good steer now, compared to one year ago. Wills said the economic recession had put pressure on the market for high-end prime beef cuts and the restaurant trade was down overseas. Other markets, such as Korea, are feeling the slower restaurant trading. Much of the Asian trading is carried out in US currency and is pegging back price expectations. About 40 % of prime beef is unsuitable for the higher- priced markets and goes with dairy cattle into the manufacturing beef market, chiefly for hamburger meat. Wills said the culling of low- performing or surplus cows by the US through government subsidies was hurting the New Zealand beef industry because it was oversupplying the manufacturing beef market."Long term, if your are optimistic, this dairy culling will have taken place and when that pressure comes off, and we get these green shoots everyone is talking about, that will lead to a pick-up in demand in prime beef, but the unknown in the mix is the currency." Despite the lower prices, farmers are unlikely to decrease cattle ratios on their farms and take on more sheep.
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