In the United States, our biggest market, prices for manufacturing beef are sitting around US$1.30 a pound at a time when the market is saturated with local and imported meat.

In previous beef cycles, this price didn't usually appear till the peak of the cycle and 84-87c was a low point.

Now, exporters are picking $1.30 to be the new low for future cycles.

As well as suffering through a drought in central western and southern states in recent months, US beef farmers have seen grain prices double as the demand for biofuel has taken off. The Australians have also been killing extra stock as they struggle with drought.

Once this market glut clears, the demand for Kiwi beef must rise.

Meanwhile, New Zealand has been working hard to increase its share of the lucrative North Asian markets.

Japan, South Korea and Taiwan have been big markets for us since they banned US beef because of a mad cow disease scare.

The ban is now lifted but the US is fumbling its way back in.

While the Americans have been away New Zealand beef exports to these countries have leapt from 70,000 tonnes to more than 113,000 tonnes a year, bringing in $310 million more a year.

Tough restrictions make it difficult for US exporters to return to their previously dominant position.

Source: Stuff