Ethanol demand may benefit NZ beef
NEW ZEALAND - The world’s thirst for energy from ethanol, an alternative to fossil fuels, is likely to drive up the price of protein meat and should be good news for New Zealand.Argentina will this year plant a record 16 million hectares of soy, and there are reports the United States will plant an extra 4 million ha of the crop, all destined to feed a proliferation of ethanol plants, mainly in the US.
Meat and Wool New Zealand senior economist Con Williams said the ethanol-driven growth in demand for corn would force up costs for feedlot produced meat, including beef, which was good news for grassfed beef producers such as New Zealand.
“The high input costs will be passed on to consumers and raise the price of all protein, including pork and poultry. Fundamentally, it will be good for us, because we are pasture based.”
The other factor impacting on world beef production was the growth in demand from Russia.
Mr Williams said it had increased imports in recent years from 488,000 tonnes a year to 730,000 tonnes, with most of that coming from Uruguay and Brazil.
Those countries have diverted product from the United States to supply Russia, taking pressure off New Zealand’s largest beef market.
Argentina’s position as the world’s third largest beef exporter has taken a battering after a bitter and ongoing dispute between ranchers and the Argentinian Government.
Reuters reports that the dispute and rising international grain costs have forced some Argentinian farmers to turn grazing land to cropping, despite beef production failing to keep pace with soaring demand for beef, both domestically and internationally.
Source: The Otago Daily Times