The prime cattle kill of steers and heifers this year is 20% ahead of previous meat industry seasons, as farmers target $6/kg CW schedules and change their farming practices.
Official figures from Beef + Lamb New Zealand reporting the slaughter tallies from meat companies ticked over one million prime cattle in mid-July.
Previously, this number was historically reached at the end of the meat industry year, end-September.
Prime cattle throughout has been averaging just under 25,000 head a week, versus 20,000 in previous years.
“The season-to-date figure is about nine or 10 weeks ahead of previous years,” AgriHQ beef analyst Sara Friel said.
Bookings for prime cattle are subject to a one-week wait at present and that wait period was as high as three weeks in mid-July, when plants shut for winter maintenance and more cattle came forward than processors had planned.
Fellow analyst Mel Croad says farm gate prices are at record highs for this time in the season; $6.15/kg CW in the North Island compared with $5.45 last year and $5.95 in the South Island, versus $4.85 last year.
Even at these price levels, the weekly prime numbers are starting to fall, which Croad thought could be farmers holding off until higher schedules expected in the spring.
“With kill rates of breeding cows through droughts, farms to forestry conversion and potentially lower heifer retention, it’s possible next season’s kill will be lower,” Croad said.
“But look at the positives – record kill figures and record prices indicating strong export markets for prime beef and stronger incentives to remain in this sector.”
Silver Fern Farms (SFF) says cattle farmers are targeting a growing range of premiums for prime supply in winter and early spring.
Some are resetting their farming practices, including store cattle purchasing, away from the traditional tight spaces for processing and the lower schedules in favour of contract periods.
This year prime cattle supplies have been up right across the country and weights have been the same or marginally better than last year.
International customers are preferring grass-fed prime beef from SFF, which then flows through into pricing and results in the higher kill.
The retail channels are paramount with foodservice slowly coming back into the picture.
Anzco head of livestock for Shannon Parnham thinks covid-19 restrictions on processing capacity in the second half of the 2020 meat industry season contributed to the large prime cattle kill early in 2021 season.
“During the lockdowns and various covid levels we had to spread the employees in the plants and it was more difficult to bone out the greater number of prime cuts,” Parnham said.
“We therefore favoured cows and bulls at that time, effectively carrying over steers and heifers into this season.”
The prime cattle stream has been profitable for companies this season and farmers have responded to the higher schedules.
“Holes are starting to appear in the prime cattle supply, which reflects the extent to which the industry has killed forward,” he said.
B+LNZ senior agricultural analyst Rachel Agnew pointed to an increase of breeding cows in 2019 as shown by the 7% rise in the June 2019 opening herd number, or 70,000 head.
Alongside that, she says there was a 2% decline in the 2019 bobby calf kill.
Subsequently, the forecast of heifer retention into the breeding herd did not eventuate over the past summer because of lack of feed.
Agnew suggested those heifers were finished and slaughtered instead, adding to the prime cattle kill this year.
Alliance livestock manager Danny Hailes suggests that droughts and some carryover from the previous season have contributed to the increased prime cattle kill.
Finishing cattle in both islands have been lighter because of restricting feeding last summer and autumn, but there are more of them coming forward.
“The number of beef heifers sent through live export will have an effect in November and December, especially around local trade,” Hailes said.
Affco livestock manager Tom Young says some cattle finishers missed out on the $6/kg prices in late 2019, when widespread drought filled the processing plants and then China got covid and schedules fell.
Those farmers consigned earlier in the spring of 2020 to get ahead of any space jams, creating a carryover effect in the prime tallies this season.
The tough summer and winter of 2020 also contributed to the carryover, with cattle kept longer on farms.
Additionally, dairy farmers seem to have raised more beef crosses two years back when they reduced dairy cow numbers.
Young says a larger bobby calf kill this year would have implications for finished cattle numbers in 18-24 months.
