Tuesday, 10 September 2019 07:55

Lamb cracks $8/kg

Written by  Sudesh Kissun
ASB senior rural economist Nathan Penny. ASB senior rural economist Nathan Penny.

Lamb prices have cracked the $8/kg mark for the second successive year and things could get even better.

ASB senior rural economist Nathan Penny believes there’s a “50/50 chance” of a record.

“At this juncture, we think there is a 50/50 chance that lamb prices will set record highs over spring, particularly as current prices ($8.25/kg) are neck’n’neck with this time last year,” Penny said in ASB’s Commodities Weekly report.

Nationwide prices last year topped out at $8.43/kg.

NZ lamb exports to China are booming because African swine fever has butchered the Chinese pork industry, leading consumers to seek other proteins.

Rabobank animal protein analyst Blake Holgate also expects lamb prices to end the season on a high.

And he notes that prices in the North Island and South Island have crossed the $8/kg mark. In late August the NI slaughter price averaged $8.35/kg and the SI averaged $8.10/kg.

Holgate says export market sentiment remains positive but key markets are performing differently.

“While China’s strong demand and pricing show no sign of waning in the immediate future, there are reports of some weakening of demand in the UK, Continental European and the US,” he said.

“At this stage, pricing has not been materially impacted in any of these markets, in part due to the limited volume of product available out of NZ.”

Penny notes that lamb export supply remains relatively tight in NZ and Australia. 

The rise in conversions of sheep/beef land to forestry will reduce lamb supply in the next few years. 

“While not necessarily a great development for the sheep industry, these conversions will nonetheless underpin lamb prices for an extended period,” said Penny.

» Connect with Rural News

More like this

NZ lamb chopped by UK supermarket

The NZ meat industry’s challenges in the UK have increased with UK retailer Waitrose planning to source all lamb from only British producers.

» The RNG Weather Report

Featured

 

Proper training beats learning on the hoof

New Zealand's first professional dairy cow hoof trimmer has fulfilled a long-held dream, setting up a training institute to bring internationally recognised standards of hoofcare to the industry.

FE researchers aim to raise awareness

Facial eczema in dairy cattle can cause significant production losses without visible symptoms, says a new group formed to raise awareness of the disease.

» Connect with Rural News

» Connect with Rural News

» The RNG Weather Report

» Latest Print Issues Online

The Hound

Useless

The Hound notes that one of the country’s poorest financially performing state-owned enterprises – the Government farming entity Landcorp (or…

Rural revolt

Your old mate hears that the antics of the Government – especially the NZ First component – are fuelling motivation…

» Connect with Rural News