Lambs plentiful, but exports 'pear shaped'
Sheep farmers are set to produce slightly more lambs this season but earn a lot less for them.
With lamb prices having slumped from a high of more than $8 per kilogram at the start of last season to barely $6/kg, farmers have gone into lambing hoping the schedule won't fall further and wipe out all profit.
Federated Farmers meat and fibre chairwoman Jeanette Maxwell has already warned that after two good years this season was looking "pear shaped" on the back of weaker European export markets and a strong New Zealand dollar.
Farmers would be tightening their belts and faced large tax bills from higher incomes earned over the last few years, she said.
Dave McGaveston, who farms at Tapawera, is one who will be taking it "very cautiously" this season.
"I'm not optimistic about prices."
He was disappointed when the price he got for his lambs last year slid from $140 to $100, and said an opening schedule of around $95 for a 17.5kg lamb this season would barely be profitable.
"It doesn't stack up against other land uses."
Those farmers with low debt levels would probably break even but others would struggle, he said.
While recession in Europe had impacted on prices, farmers were also paying for inefficiencies in the meat industry which had done little to sort out its problems, Mr McGaveston said.
He and his son were almost midway through lambing 6000 ewes on their two farms but wet weather over the last few weeks had caused higher lamb losses, particularly where ewes had to look after twins.
Mr McGaveston said it was too early to say what his lamb drop would be but pregnancy rates in his young ewes had been affected by a worm buildup.
Town and Country vet Danny Hajdu said most farmers' flocks had scanned slightly better than last year, although not as high as they had hoped.
"It was a wet summer, but problems with worm burdens and fungal toxins affected the quality of pastures."
However, it appeared Nelson sheep numbers had stabilised after several years of decline, stock condition was generally good and there was plenty of grass around.
Up until the last few days the wet spell had meant lambs had been "obliged to be born with snorkels", but survival rates hadn't been too bad because the weather hadn't been cold or stormy.
Mr Hajdu said lambing was well under way on lowland areas and around Tapawera and was just about to start at Kikiwa and Korere, but was still weeks away in St Arnaud.
Eleanor Greenhough, who is all but finished on her Moutere property, said the rain had made for a difficult time and lambs had struggled to thrive.
"It appears we had more twins than last year but more have died."
Ms Greenhough said after receiving up to $156 for early lambs last year, she was bracing for much lower returns this season of around $80-$90 for a 17.5kg animal.
It was ominous that her meat company Alliance had been very quiet about the schedule. "Normally there is a supplier meeting in August but we haven't heard from them so I think the news is bad."
Nearby at Upper Moutere, Peter Moore is enjoying a much easier lambing than last year when snow hit at the peak.
Survival rates were up, although lambs appeared a little smaller, and his 3000 ewes had suffered few problems.
His older ewes had scanned at 151 which was normal for his property, while his two-tooths were down 6 per cent to 139 but his hoggets up 18 per cent to 101.
As a result, "we've got the potential for more lambs than we have ever had".
Mr Moore said he expected lamb prices to fall below $6/kg and an average-weight lamb to fetch closer to $90.
While it was still an historically good price, farmers had got conditioned to receiving $120-plus over the last two years, he said. There would be no repeat of the $187 he received last year for his cull ram lambs.
"We certainly enjoyed those high prices, but at least now I'm not getting as much stick from people who buy lamb at the supermarket."
Mr Moore said he remained confident about the future of sheep farming, with new markets for lamb in Brazil and Asia opening up and a looming shortage in quality meat as fewer suppliers struggled to keep up with world demand.
- © Fairfax NZ News