Lamb prices down but prospects positive
Average lamb prices look as though they will be down 25 per cent nationally at $84 to $85 a lamb for the 2012-13 season ending next month.
Softer overseas markets in the northern hemisphere and smaller lamb weights from the drought drove prices down from $113.60 the previous season.
While it's early days yet the Economic Service at Beef + Lamb New Zealand expects prices will be somewhere between $90 to $100 for the coming 2013-14 season. That will depend heavily on the state of the dollar with the latest analysis for it to weaken slightly.
Imported prices for chilled lamb were down in the United Kingdom about 17 per cent from the year before in pounds stirling and back 22 per cent in Europe, particularly France, Germany and Belgium. World markets including North America were down from the year before.
Economic Service executive director Rob Davison said farmers could have a better farming year for 2013-14 as long as drought was avoided.
"The prospects are for a better year than we have come through.
"We don't normally get two doozies in a row."
The best estimate is the total lamb kill would be about 18.6 million for 2013-14 and the 2012-13 season was shaping up to be about 20.2 million despite the drought.
Davison said the drought had reduced lamb weights for 2012-13 and could be expected to take a toll on lamb numbers for 2013-14.
"Looking ahead, the early indications are that we will be around 18.6 million.
"That's down 1.6 million and that's a flow on from the drought. We expect a decrease from the lambing percentage and surprisingly in our livestock survey we are only down 1 per cent in breeding ewes.
"That surprised us too and it looks like enough stock weren't killed and we didn't get the mutton kill we expected."
Farmers had come through a reasonable winter after a hard drought and even though they would prefer to have more feed, the season was setting itself up as reasonably good.
Nationally, ewes are in lighter condition with more single lambs expected in the drought regions and the best outcome for farmers would be a mild spring. Lambing will pick up next month with the bulk of the lamb crop carrying through to October and beyond for the backcountry.
Davison said the tighter lamb supply could be expected to have an impact on overseas demand.
"Prospects look good for tighter global supplies for lamb and even Europe has had a tough spring and have had a dry summer so their ewes will be back in condition."
The 20.2 million lambs expected for 2012-13 is up from 18.9 million the previous season and assisted by one of the best lambing percentages on record and a good lamb yield from ewe hoggets.
Lamb weight averages were expected to be down about 4 per cent for 2012-13 and lower than average because of the drought.
Growing conditions were challenged this summer with Hawke's Bay receiving little rain from late spring and the dry starting to spread in January to the whole of the North Island and into parts of the South Island.
Lamb processing was early particularly for the North Island with lambs killed at lighter weights during the drought. The average lamb weight is expected to be 17.88 kilograms for 2012-13 from a record of nearly 18.7kg the previous season.
The Economic Service will release its lamb crop survey in mid-November with its new season outlook report due out at the end of the month.
- © Fairfax NZ News