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Source: MIL-OSI Submissions

meat prices fall back from recent highs – Media release

2 June 2020

Export prices for meat, including lamb and
beef, fell in the March 2020 quarter, from record levels at the end of
2019, Stats NZ said today.

“The fall in export prices coincided with
the COVID-19 outbreak, which was declared a global pandemic in March 2020,”
business prices delivery manager Geoff Wong said.

“The COVID-19 outbreak affected demand in
export markets and disrupted supply chains, such as sea and air freight.”

Export lamb and beef prices fell in the March
2020 quarter (down 10 percent and 5.8 percent respectively), retreating
from record high levels experienced towards the end of 2019. Volumes and
values for lamb and beef also fell in the quarter.

“This is consistent with a fall in domestic
retail prices of some meat products, such as lamb chops, in March,” Mr
Wong said. See Food
price index: April 2020

“Before the latest drop, the export prices
of both lamb and beef had generally been rising over recent years, on the
back of strong international demand,” Mr Wong said. “Despite the drop
this quarter, lamb and beef prices remain relatively high.”

In the March 2020 quarter, we exported more
beef products to the United States than the Chinese market, which was affected
by COVID-19 earlier in the quarter.

Export prices for forestry products also
fell in the March 2020 quarter, down 3.4 percent. This follows export price
rises for forestry products towards the end of 2019.

“We saw a fall in log exports at the start
of this year, especially to China – our largest export market for logs,”
Mr Wong said.

The fall in overall export prices was partly
offset by a rise in dairy product prices, up 0.8 percent in the March 2020
quarter. Milk powder prices led the increase in dairy export prices, up
2.6 percent. However, butter prices partly offset this increase, down 3.4

Terms of trade fall

The merchandise terms of trade fell 0.7 percent
in the March 2020 quarter, the first fall since the December 2018 quarter.
The drop reflects a fall in total export prices (down 0.2 percent) and
a small rise in import prices (up 0.5 percent) in the March 2020 quarter.

Terms of trade is a measure of the purchasing
power of New Zealand’s exports abroad. An increase means New Zealand can
buy more imports for the same amount of exports.