Why has beef prices increase like they have?
For the remainder of 2025, New Zealand's beef market is expected to experience a combination of production declines and export growth, influenced by both domestic factors and international demand.
We are wrestling with a global protein shortage with no end in sight. Key markets United States and UK/Europe are faced with shrinking domestic cattle herds. These markets are prepared to pay to secure product.
China now has empty freezers and now showing more interest and expressing interest.
New Zealand Beef supply and production has its own challenges:
Production Forecast: New Zealand's beef production is anticipated to decrease by approximately 6% in 2025. This reduction is primarily attributed to a 7% decline in beef cattle numbers in 2024 compared to the five-year average, leading to fewer beef calves raised over the past two years. However, there is potential for cattle numbers to stabilize or even increase slightly into 2026. Rabobank New Zealand
Export Outlook: Despite the production decrease, beef exports are projected to reach a record 700,000 metric tons (MT) in 2025. This surge is driven by sustained demand from key markets, including the United States, China, the United Kingdom, and the European Union. The U.S. continues to be a significant destination for New Zealand beef, with expectations of increased imports due to reduced domestic production. Additionally, the NZ-UK Free Trade Agreement is expected to enhance duty-free access, further boosting exports to these regions. Food Business Africa+1Home+1
Pricing Trends: Farmgate beef prices have remained robust, with early 2025 prices well above five-year averages. This strength is attributed to strong export demand and lower cattle inventories. Notably, U.S. imported beef prices for 95 CL bull rose to NZD12.66/kg in late February 2025, more than 40% above the five-year average. Rural News Group+5Rabobank New Zealand+5Farmers Weekly+5
Slaughter and Herd Dynamics: Cattle slaughter numbers are forecasted to increase slightly in 2025, totalling approximately 4.645 million head. This marginal rise is linked to changes in the dairy industry's approach to non-replacement calves, leading to more heifers and steers being finished at mature weights. Consequently, the national beef herd is projected to contract, with numbers expected to decrease from 9.56 million at the start of the year to 9.41 million by year's end. Factors influencing this contraction include declining on-farm profitability, low farmgate prices, and favourable pasture conditions resulting from a warmer winter.
Domestic Consumption: Domestic beef consumption is projected to remain steady at 72,000 MT in 2025. However, consumer preferences are shifting towards chicken, now comprising approximately 33% of protein consumption, while beef accounts for about 22%. This shift is influenced by economic factors, including high official cash rates and inflation, which affect discretionary spending.
In summary, the remainder of 2025 is expected to see New Zealand's beef market navigating a landscape of reduced production and herd sizes, balanced by record export levels and favourable pricing. These dynamics are shaped by both domestic agricultural practices and strong international demand.
The dramatic cost price increase we are in the middle of is purely a product of supply and demand.
What we have seen in the last 12 months:
Cost price - main steak cuts
One year on | May 24 - May 25 increase % |
PS Eye Fillet | 67% |
PS Rib eye | 45% |
PS Striploins | 46% |
PS Rumps | 58% |
We need to add that the NZD has also weakened against these major trading partners.
Currency shift
23-May-24 | 23-May-25 | Change | |
EURO C/NZD | 56.3 | 52.2 | -7.3% |
USD C/NZD | 61.0 | 59.0 | -3.3% |
Content and information supplied by Simeon Bellworthy of Ken Wilson Meats and Ken Thomas of Bidfood NZ.
