Domestic price of beef

IBISWorld forecasts the domestic price of beef to fall by 3.0% in 2024-25 to reach 120.9 index points. Domestic per capita beef and veal production is projected to fall during the year, as the national beef cattle herd declines for a fourth year in a row. Nonetheless, relatively stable domestic consumption and a fall in export volumes will boost supply in the local market, placing downward pressure on domestic beef prices in 2024-25. Rising production from Australia and Brazil has weakened demand for New Zealand beef.

The domestic price of beef is influenced by a range of factors. A substantial majority of beef produced in New Zealand is expected to be exported, with exports having increased as a share of production over the past five years. As a result, domestic beef prices are heavily influenced by international supply and demand conditions. In 2019-20, China overtook the United States as the largest destination for New Zealand beef. Outbreaks of African Swine Fever (ASF) led to a substantial protein shortage boosting demand for New Zealand beef substantially. Subsequent outbreaks of ASF in other countries in Asia and Europe, as well as outbreaks of lumpy skin disease and foot-and-mouth disease in Indonesia and other Asia-Pacific countries, have tightened global beef supplies in recent years. However, in 2023-24, the United States again overtook China as the number one destination, with local supply there impacted by drought.

Beef prices are also influenced by domestic supply and demand conditions. Per capita beef consumption has fallen over the past five years. Rising health consciousness has caused some consumers to seek out lean sources of protein, which are sometimes perceived to be healthier, such as poultry. The volume of beef and veal production in a given year also affects domestic beef prices. Adverse weather conditions, such as low rainfall, can increase feed costs and constrain beef supply, boosting domestic beef prices. Domestic milk prices can also affect beef supply, as in times of low milk prices, dairy farmers may reduce herd sizes, increasing the supply of beef and putting downward pressure on beef prices.

Over the past five years, the domestic price of beef has increased robustly. While domestic production volumes have risen, exports have risen at a stronger rate and now account for over two-thirds of production. Higher feed prices, and other global supply chain disruptions have also flowed through to higher domestic beef prices for consumers in New Zealand. Overall, IBISWorld anticipates the domestic price of beef to rise at a compound annual rate of 2.4% over the five years through 2024-25.