REUTERS
25/10/2006
Soaring grain prices are likely to be a boon for New Zealand's exports of beef, which come from grass-fed cattle, unlike US and Australian beef, says Trade Minister Phil Goff.
"They provide a competitive advantage for the New Zealand grass-fed product," Goff said in Tokyo yesterday, pointing out that more expensive grain was pushing up the price of grain-fed beef.
About 98 per cent of New Zealand beef is from grass-fed cattle, while the bulk of US, and more increasingly more Australian cattle, are fed corn, wheat, barley and sorghum.
World grain prices have been rising, led by a rally in wheat, as concerns about supplies deepened. Those concerns followed Australia forecasting this month that drought meant its wheat crop this year would be less than half that of the previous season.
Wheat futures at the Chicago Board of Trade marked a 10-year high above US$5.50 a bushel this month, while corn futures hit a two-year high at over $3.10 a bushel.
New Zealand became a major beef exporter to Japan after Tokyo banned US beef imports in December 2003 after the first US case of mad cow disease was discovered.
New Zealand exported 38,000 tonnes of beef to Japan in the production year that ended in September 2005, about 10 per cent of Japan's market for imported beef.
Before the ban, New Zealand's share was about 2 per cent.
Despite resumption of US beef imports, New Zealand will continue to be a major supplier to Japan as the product appeals to consumers concerned about food safety.
New Zealand has been pushing its case as a supplier whose environment is free of such diseases as mad-cow and foot-and-mouth.
