Beef and veal production

IBISWorld forecasts beef and veal production to rise by 2.1% in 2023-24, to reach 748.6 kilotonnes. Output is set to rise following two down years, as farmers rebuilt their herds. Downstream labour supply shortages at meat processors have eased, boosting production capacity. Additionally, the decision by the country's largest dairy processor, Fonterra, to end the on-farm euthanising of bobby calves at its supplier farms has increased veal production.

Beef and veal production has been strong over most of the past five years, with production volumes influenced by global market conditions, fluctuations in prices and domestic weather conditions. In the current year, over 90.0% of beef and veal produced in New Zealand is expected to be exported. Strong demand for New Zealand beef in export markets, particularly from China and the United States has supported higher export and domestic beef prices over the past five years. In response to strong prices, beef cattle farmers have increased beef and veal production over the period. Demand for beef and veal from China has been particularly strong following multiple outbreaks of African Swine Fever, which devastated their national swine herd. However, environmental regulations introduced during the period designed to reduce greenhouse gas emissions discouraged farmers from rebuilding herds and, in some cases, encouraged them to leave the industry.

Weather conditions also influence beef and veal production. Pasture quality can suffer in years of low rainfall, causing feed costs to rise for beef cattle farmers. In response to rising costs, farmers may reduce herd sizes, which can boost production in the short term but reduce beef and veal production in future years. Strong cattle and beef prices have encouraged farmers to increase beef and veal production over the past five years. Overall, IBISWorld anticipates beef and veal production to rise at a compound annual rate of 1.4% over the five years through 2023-24.