Carbon forestry making supermarket beef prices more expensive
August 22, 2026
Summarised by Centrist
As global demand pushes beef prices higher, New Zealand has less flexibility to respond by expanding pastoral production because some productive land has been converted to forestry.
Beef mince has climbed above $24.40 a kilogram, with Rabobank pointing to tight global supply and exceptionally strong US demand for New Zealand beef. Around 80% of New Zealand beef is exported, meaning local consumers compete with what overseas buyers are prepared to pay.
But the price surge comes after years of sheep and beef country shifting into forestry. Beef + Lamb New Zealand says almost 330,000 hectares of whole sheep and beef farms have been sold for afforestation since 2017, estimating more than two million stock units have been lost to forestry.
Government climate policy has helped alter the economics of that land. Parliamentary Commissioner for the Environment Simon Upton says policies, “particularly settings under the current New Zealand Emissions Trading Scheme”, are “driving a wave of land use change to carbon forestry”.
The immediate pressure on beef prices remains global. Rabobank says the US beef cow herd is at its lowest level in 75 years, while New Zealand beef production fell 6% in 2025 to its lowest level since 2017.
The longer-term question is whether New Zealand has made itself less able to respond when prices rise.
Once productive farmland becomes forest, increasing sheep and cattle production in response to strong prices becomes harder.
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