NZ cow prices rise to record on tepid start to slaughter season

Tuesday 11th April 2017

New Zealand's cow slaughter season has got off to its slowest start in five years, pushing prices for stock to record highs for this time of year.

Just 41,789 cows were slaughtered in the fortnight to March 11, the lowest level for this period since 2012, according to AgriHQ. That pushed up the price meat processors paid for stock to record levels for this time of year, with the North Island price last week reaching $4.50 per kilogram, and the South Island price hitting $4.20/kg, AgriHQ said.

The kill season for cows generally starts in March and runs through until the end of May with farmers selecting their least productive dairy cows for slaughter as they prepare for the winter months when there is less feed available. Farmers have culled heavily in recent years as they sought to reduce stock numbers when milk prices were low, meaning they started this season with less excess stock while good grass growth bolstered the amount of feed available.

"Processors are eagerly awaiting the impending cow slaughter season but have found little activity to date," said AgriHQ analyst Reece Brick. "Farmers have been slow to send cows to slaughter.

"While heavy culling in recent years will limit the total numbers for the season, very good on-farm conditions have also restricted numbers offloaded lately."

Even though meat plants were currently underutilised, processors were reluctant to reduce capacity in the expectation slaughter rates may pick up towards the end of the season, Brick said.

"This excess capacity has caused strong procurement competition for cows," he said. "All signs point to slaughter prices falling sharply once kill numbers increase."

Brick said the cow kill may be starting to pick up following the recent flooding in the Bay of Plenty, and the Easter and Anzac holiday periods meant there were three short killing weeks ahead, which is likely to push down cow slaughter prices.

(BusinessDesk)

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