NZ: Little room for lamb returns to rise
New Zealand Exporters have yet to see signs that overseas markets are prepared to pay more for lamb.
Continued market weakness in China and another record lamb production year from Australia continue to dampen global prices, dashing hopes of an immediate boost to sheep farming fortunes.
AgriHQ is forecasting some improvement in winter pricing, but senior analyst Mel Croad said “the degree of upside at this point is not startling, given we are starting from such a low point”.
Meat companies are cutting costs, looking for efficiencies and reducing their reliance on China.
Meat and Livestock Australia (MLA) is forecasting yet another year of record lamb production this year before easing slightly.
Croad described this season as unusual.
Since January the lamb schedule has stayed within a tight band while the 626,000 lambs killed in the lead-up to Easter marked just the second time this year and third time in three years that a weekly kill has exceeded 600,000 head.
The kill to the end of March was 6.5% or 691,000 lambs ahead of the same time last season, indicating potentially tighter winter supplies.
“These tight supplies may not be enough to fully offset the weaker market fundamentals and the continued surge of production out of Australia,” Croad said.
Neal Wallace | Farmers Weekly NZ
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