For Immediate Release October 17 2002
Dairy Meats bobby calf payout forecast reviewed
Dairy Meats NZ Ltd has continued to review its forecast of total payout for bobby calves for the current season, and
whilst it is expecting the final payout to ease from early-season predictions, it believes it will remain well above the
levels indicated by various meat schedules.
The company's latest forecast is about $23 for an average lightweight carcass, about $46 for an average medium weight
carcass, and for a 21 kg heavyweight carcass (about 42 kg live-weight) a net return of about $75.
The value of commodity veal in the United States has weakened slightly because of increased competition from imported
veal, plus a supply excess of domestic calves. As well, drought conditions in the US have pushed up grain prices making
beef rearing less attractive, and that has resulted in increased numbers of young animals becoming available to the
general processing pool. The New Zealand dollar remains reasonably stable against the US dollar and this has helped to
buffer export receipts as they are converted to NZ currency.
Japan and Europe remain difficult markets for veal.
The downturn in the Japanese economy has put pressure on domestic sales, resulting in higher than expected inventories
in the market and pressure from importers to ease back new sales volumes and values. In Europe, market values for veal
have weakened because of excess inventories of formula-fed veal created in part by the early stages of the recent BSE
and Foot & Mouth concerns, when animals were grown to much larger than normal size. The cost of GATT licenses for imports remains
uncertain, further tightening achievable values for New Zealand imports.
For other commodity products such as skins and offals, there has been little change in market demand or value from last
year.
Dairy Meats is continuing the drive into added-margin markets with a range of new products such as portion-controlled
veal products, ready-made stocks and sauces, and pre-cooked portioned products. It is also continuing to expand its
enzyme extraction abilities with new technologies that enable a greater utilisation of the calf, and which also allows
its technical and processing skills to be applied to other animal types.
ends