“A contradiction in beef numbers globally alongside strong demand from the US is likely to build upon an already strong pricing base for this year and beyond for New Zealand beef.” 

Emma Higgins, RaboResearch senior agricultural analyst.

It’s great to see that 2025 has started off positively with Rabobank’s annual Agribusiness Outlook for 2025 highlighting how improved supply and demand fundamentals underpin more optimistic farmgate pricing for the year ahead. The report forecasts that global demand will continue to see prices above five-year averages for beef. In addition the declining Australian sheep inventory will hopefully provide farmers a vastly improved outlook than the 2023/24 season.

Additionally, if the RBNZ looks to cut the OCR as indicated, now that inflation is likely to be more under control, and farm input costs don’t continue to rise then hopefully our sheep and beef sector is looking for a more positive year ahead.

The US Trump Tariff picture

All eyes and ears are on the United States for news of more countries being hit with aggressive import tariffs announced in early February by incoming president Donald Trump.

New Zealand beef exporters are still waiting for a clearer picture to emerge on whether Trump will extend the reach of the 25% tariff on all imported goods he announced in early February for near neighbours Canada and Mexico, and 10% tariff on imported goods from China.

In vintage Trump fashion, after announcing the tariffs would have an almost immediate effect, he backed off his earlier statements and gave all three countries a further month in what many commentators see as a willingness to negotiate on the wider trade and security issues so important to him.

There are no quota restrictions on beef imports to the US from either Canada or Mexico, and both countries send a significant volume of high-quality beef and live cattle for feedlot finishing over their borders. 

AgriHQ reported in early February that the US has record low supplies of domestic beef in cold storage and little choice but to top up supplies with imported product including NZ, ranked the fifth largest source of imported beef in 2024 behind Australia, Canada, Brazil and Mexico. 

It’s widely believed New Zealand beef (and lamb) is not a direct target for Trump’s tariff plans, but the fear remains that product from here could be hit if his tariff net is widened.

An analysis of the situation by Rabobank’s research team has just been released and concluded that NZ imports would “almost certainly” be hit with tariffs in the near future.

It notes that President Trump made universal tariffs of 10-20% (“tariffs on everything from everywhere”) a core element of his election campaign.

US media has also reported the US Treasury Secretary Scott Bessent floated a plan to introduce universal tariffs at an introductory rate of 2.5%, increasing by the same amount each month until the rate reached 20%. That provides an indication of where tariff rates may land, Rabobank concluded. 

Regardless of the tariff turmoil, the US remains a strategically important market for NZ beef exports and an increasingly valuable market for premium lamb cuts. NZ product plays a complementary role in US imported beef market, supplying lean beef which is blended with US grain-fed beef for burger patties.

NZ farmgate prices remain at record levels and the outlook is positive, albeit with no clear picture on potential US tariffs or the impact of retaliatory tariffs threatened by Canada and other countries.

Imported lean beef prices in the US have steadily strengthened over the past quarter, largely off the back of the US domestic cow kill slowing from late December to early January. The US domestic lean (90CL) price is now more than 40% above its five-year average, underpinning the significant improvement in imported lean beef prices.

Stronger pricing out of Europe

Looking at other beef markets, Silver Fern Farms (SFF) reported in its mid-February supplier update that customers visiting NZ from Europe in the previous two weeks were positive on beef demand for two reasons. Firstly, South American countries are shipping lower volumes and secondly, European Union domestic beef production is forecast to reduce by 100,000mt in 2025 which will create a steady increase in demand.
SFF’s food service customers in United Kingdom have also been active on chilled beef, and the company is reporting that supply programmes initiated last year under the Free Trade Agreement have led to a lot of repeat business and further growth in volumes.

Other Asian markets are quiet, largely because of the surge in lean grinding pricing out of the US forcing markets like Korea out of the supply mix. The company says demand from China has eased for some secondary cuts, but it still remains a key market for white offals in particular, and also for high-value cuts such as beef short ribs.
“We anticipate a reset on pricing and demand following Chinese New Year and will wait to see how this lands.”
The significantly weaker NZ dollar against the US currency is also helping our farmgate prices continue their recent strength. Farmgate prices for prime bull, steer and local trade are all well north of $7/kg carcase weight, about $1.50/kg or $450/head more for a 300kg bull or steer higher than a year ago.
After a strong season of dairy beef sales in the spring and early summer last year, beef finishers will be watching the results from the early beef weaner fairs just getting underway in the upper North Island this month for a signal on numbers and prices.
Given the strength in export prices and good growing conditions in the spring and early summer for many regions of the country, calves are likely to be hot property this season as finishers gamble on Trump’s mood for wider tariffs.