Lamb forecast falls short of expectations

Waikato’s sheep farmers will take a big hit in the pocket if the low schedule lamb price forecast for the 2012-2013 season holds.

Beef + Lamb New Zealand economic services executive director Rob Davison said average lamb prices were likely to fall from $113 in the 2011-2012 season to $95 for the 2012-2013 season.

That’s a starting price of $5.20 per kilogram, a big slide on last year’s $7.50/kg-$8/kg peak prices, while the wool price is falling 25 per cent.

For Waikato, as well as Northland and the Bay of Plenty, sheep and beef farm incomes are expected to fall from an average of $89,000 in the just ended 2011-2012 season to $69,000 in the new season because of the price decreases.

That is a 23 per cent fall and will affect the 2100 sheep and beef farms in Waikato and wider region.

Davison said that the past two years had been good for farmers but the strength of the New Zealand dollar against the euro and pound, affecting the countries where exports were most likely to end up, was hurting lamb prices. ‘‘There’s a general lack of confidence – people are conservative because of the recession,’’ he said.

Waikato Federated Farmers meat and fibre vicepresident Chris Irons said farmers were bracing themselves. ‘‘They’re disappointed. They won’t like prices dropping because expenses are staying the same,’’ he said.

‘‘I think there’s understanding why. It’s coming off the back of the meatworks. They’re hurting because they took their eyes off the ball around Christmas last year and because the New Zealand dollar is high.’’

Irons, who farms at Te Kuiti, said most sheep farmers had counted more lambs this year but the numbers were not enough to offset the price drop. He has 2700 ewes on his farm and saw a 3 per cent increase in lamb numbers during lambing.

Federated Farmers meat and fibre chairman for Hauraki- Coromandel Mike Morrison said most of the bigger farms in the area had seen a 5 per cent to 10 per cent increase in lamb numbers. Most farmers in the region were hoping for a start price of $6 a kg, he said. ‘‘We’re disappointed.’’