Kiwi dollar helps beef prices

 Farmgate returns for beef are 11 % ahead of this time last year despite flat or falling sales in key markets, M&WNZ says in Stuff. The gains have all come from the big fall in the kiwi dollar. However, American beef farmers' reaction to rising costs and falling sales that are estimated to cost them US$100 million (NZ$200 million) a week has sent a shockwave through international markets that will take six months to clear, according to Meat & Wool's market development general manager Craig Finch. Recession-hit Americans are eating out less and demand for top meat cuts has slumped. Farmers already hit by escalating feed costs have reacted by closing their beef feedlots or drastically reducing their size. The result was a huge increase in the slaughter of beef animals and a glut of meat on the market, Mr Finch said yesterday. This was spilling over to the valuable Asian markets where the US was battling hard to regain ground lost from disease scares dating back six years. The effect on NZ was mixed. In the United States, where diners were preferring to eat more hamburgers, this suited NZ as most of its beef exports were of manufacturing quality meat. When the market glut clears in about six months, prices may begin to edge up again, he said. In Japan, where the market was mainly of top quality cuts in supermarkets, restaurants and hotels, sales were flat. Customers were switching from prime cuts to cheaper meats. With its domestic market in turmoil, the US was desperate to find an outlet for its beef.