Record returns from lamb and mutton
Low stocks push lamb and mutton to a high
New Zealand meat processors are having to pay more for lambs as supplies dwindle, pushing lamb and mutton returns for Kiwi farmers to record levels for this time of the year, according to AgriHQ’s Monthly Sheep & Beef report for March.
Better rainfall in dry areas of the South Island and lower lamb growth rates in the North Island have led farmers to keep hold of their stock instead of sending them to slaughter, and a higher kill rate earlier in the season also means there is now less stock available than normal, said AgriHQ analyst Reece Brick.
That’s pushed up the prices processors are offering for both lamb and mutton at a time when overseas markets are strong, underpinning prices as a whole.
In the North Island, processors were last week offering $7.10/kg for lamb, up from $5.35/kg at the same time last year and ahead of the fiveyear average of $5.07/kg. In the South Island, the price was $6.95/kg, up from $5.30/kg last year and ahead of the five-year average of $5.01/kg.
Meanwhile for mutton, North Island processors were last week offering $4.85/kg, up from $3.30/kg at the same time last year and ahead of the five-year average of $2.95/kg. In the South Island, the price was $4.75/kg, up from $3.30/kg last year and ahead of the five-year average of $2.77/kg.
“A hole in the lamb kill emerged through February and early March based on reasonable or better rainfalls and only moderate lamb growth-rates in certain regions,” Brick said.
“Steady export returns combined with mediocre supplies underpinned slaughter prices, which have either held stable or lifted marginally each week. Repeated weekly price increases have now pushed both lamb and mutton returns to all-time record levels for this point in the season.”
Demand for sheep meat in China had continued following a lull during the country’s New Year celebrations, Brick said.
“Any worries about post-Chinese New Year trading was put to bed in the last fortnight,” he said.
“In-market pricing on key cuts into China are stable, and although the odd importer has shown resistance to current pricing, exporters have generally been able to find other buyers to take any volume they are not willing to commit to.
“The general sentiment from NZ exporters is positive, and they expect stable or firming prices through the coming weeks.”