New Zealand Drought to Impact American Beef


New Zealand North Island Farmers are relying on feed from the South Island farmers to keep their cattle and sheep feed. They are currently losing weight. It’s been reported that some have lost up to 10kg, which when calculated over a herd of cattle could be quite costly.

New Zealand’s biggest export is beef and lamb, especially to North America, with increasing focus on Asia, China and Japan. Approx. 80% of New Zealand’s beef is exported.

• New Zealand accounts for 8% of world beef exports annually
• 70 – 75% of New Zealand beef exports go to The North American market
• Increased focus on beef exports to North Asia, including Japan, South Korea, Taiwan and Hong Kong.
• Beef exported to North America is usually processing beef in frozen form
• Beef exported to North Asian countries supplies the Table beef market in frozen or chilled form
• The average export carcass weight is approximately 300 kg (bone-in weight)

With water being an essential ingredient to our farming exports, it’s safe to say it will hit all of us in the pocket; farmers, consumers, Fonterra and the New Zealand government. Dairy prices will rise, as will beef and lamb. If Untitledthe farmers loose at the gate, they collect it from the consumer’s pocket. Fair? I don’t think so. What also infuriates me is, when they increase the price of dairy, namely milk and cheese which is considered a New Zealand staple, I doubt that it will return to the price prior to the drought costs. What annoys me even more so is that, the farmers lose out at the gate and we pay for it? Farming is a business; part of running a business is costing in a forecasted percentage of loss, why is Mother Nature not one of those losses? How about, the next time it rains cats and dogs, the average New Zealand Building Industry business, sends the New Zealand government a bill, or better still he puts up the rate and passes it to the customer. I can just see the argument over payment developing in front of me… We would not accept that scenario from a tradesman, why on earth do we accept it from farmers? I understand someone should take a hit, but shouldn’t it be the farmer. Not according to the corporate giants, the farmers or the New Zealand government. Because the export of beef and lamb is such a large earner for the government in taxes, the New Zealand farmer has us all over a barrel. And I suppose that’s just life. It’s a running theme in New Zealand that the minority seems to have the New Zealand government over a barrel, while the New Zealand consumer pays for it, one way or another.

With the hard ground that comes with a drought, it could also affect the winter sports, especially UntitledRugby Union. Our councils are finding it difficult to maintain parks. Higher risk of broken bones, so will this give our largest medical insurer ACC (Accident Compensation Commission) an excuse to put those rates up also. And the hits just keep coming.

Should the New Zealand consumer pay for Mother Nature? In New Zealand we have EQC (Earthquake Commission) which the New Zealand consumer pays for when they purchase insurance. The insurance companies take it from the consumer and pay the EQC. The EQC used to cover war damage in the mid 1940’s, but now it’s used to cover earthquakes, tsunamis, natural landslips, volcanic eruptions and hydrothermal activity. Its pockets have taken a large hit due to the 2010 and 2011 Christchurch earthquakes, which is exactly what its inception was for. No where does it say drought! It’s an insurance cover for residential land, storm and flood damage, not business. So, which budget is the government paying it out of? I have no clue as to which budget, Finance Minister Bill English will take it from, but I certainly know Untitledwhose, yours and mine, Mr and Mrs J taxpayer!
There is certainly more to this story. And I feel for the cattle and sheep under duress, along with other animals. I know for sure that I’ll be paying more for my dairy, beef and lamb products. I feel for those who are already struggling, and those with large families that will need to stretch the budget even more so, knowing its already past breaking point.

Here’s a clue Finance Minister Bill English… increase the minimum wage to something that’s even remotely viable to live on.

It certainly is the worst drought I’ve seen, and I’ve lived in New Zealand all of my life. I’ve lived in Northland and Southland. Southland is also looking dismal. I certainly hope the southland farmers haven’t jumped the gun by sending their extra feed north, when they may need it themselves.

It’s fair to say, that most of us only see dry ground, when in fact, it affects an entire countries earning potential, financial stability and lifestyle, and that’s the real story. Where will we be in a month from now, even in only two weeks?

Debra Wattes

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