Wednesday, 16 August 2023 07:55

Lamb price to remain soft

Written by  Sudesh Kissun
The sheepmeat sector is bracing for opening lamb prices in November of around $7/kg, equating to $40-$45/head lower than the previous two years. The sheepmeat sector is bracing for opening lamb prices in November of around $7/kg, equating to $40-$45/head lower than the previous two years.

Lamb prices are expected to remain soft as Chinese consumers struggle to put the effects of Covid behind them.

Lamb consumption in China hasn’t taken off post-Covid, resulting in high inventories in coolstores.

North Island prices last month dipped to $7.20/kg. In the same week a year ago they were $9.10/kg. The South Island lamb price was forecast at $7.30/kg compared to $9.20/kg this time last year.

Meat Industry Association (MIA) chief executive Sirma Karapeeva says the drop in lamb schedules is very much a China story.

“There is a lot of protein sitting in Chinese cold stores,” Karapeeva told Rural News. “The inventory is very high, and they are not buying. I suspect it will take a little while to work through the inventory levels before we see an uplift in demand and price.”

ANZ agriculture economist Susan Kilsby notes that a surge in demand for lamb products that followed China’s post lock-down reopening was short-lived.

Kilsby says Chinese importers were initially positive, pushing up the price of lower-priced lamb cuts and mutton, but they are finding it challenging to move goods on. “Consumption has not lifted as quickly as expected, because consumers remain financially constrained and don’t yet have the confidence to spend as much as they once did on relatively expensive products.”

Demand from importers has since waned, and prices have quickly retreated to lockdown levels. On top of that, a surge in supply from Australia has contributed to the current market imbalance. Kilsby says Australian producers –also hoping to take advantage of the expected pick-up in Chinese demand – had increased exports over recent months.

“The downward trend in pricing now means buyers are holding off in the hope of even lower prices. Added to which, China’s demand for lamb generally weakens over the northern summer.”

Kilsby says we could be waiting some time for any significant improvement.

MIA chair Nathan Guy told the recent Red Meat Sector conference that exporters are facing a lot of headwinds in China.

“Their inventories are full, and the economy has softened,” he says.

Youth unemployment for those aged between 16-24 years is 21%.

Guy says this is a concern because “those are the people who go out and spend”.

The red meat sector is planning a trade trip to China later this year. Guy says the trip will be about creating greater awareness of NZ protein.

“We are going there to wave the flag and make China aware that we are great producers of protein that they need.”

More like this

Editorial: NZ's great China move

OPINION: The New Zealand red meat sector, with support from the Government, has upped the ante to retain and expand its niche in the valuable Chinese market - and the signs are looking positive.

Red meat's China push

The red meat sector is launching a new campaign to lure Chinese consumers to New Zealand grass-fed beef and lamb.

Featured

Massey Research Field Day attracts huge interest

More than 200 people turned out on Thursday, November 21 to see what progress has been made on one of NZ's biggest and most comprehensive agriculture research programmes on regenerative agriculture.

Expo set to wow again

Stellar speakers, top-notch trade sites, innovation, technology and connections are all on offer at the 2025 East Coast Farming Expo being once again hosted in Wairoa in February.

A year of global challenges

As a guest of the Italian Trade Association, Rural News Group Machinery Editor Mark Daniel took the opportunity to make an early November dash to Bologna to the 46th EIMA exhibition.

National

Winter grazing warning

Every time people from overseas see photographs of cows up to their hocks in mud it's bad for New Zealand.

ANZ defends farm lending rates

The country's largest lender to the agriculture sector says it's not favouring home loans over farm and business lending.

Machinery & Products

Expo set to wow again

Stellar speakers, top-notch trade sites, innovation, technology and connections are all on offer at the 2025 East Coast Farming Expo…

A year of global challenges

As a guest of the Italian Trade Association, Rural News Group Machinery Editor Mark Daniel took the opportunity to make…

» Latest Print Issues Online

The Hound

Review SOEs!

OPINION: NIWA has long weathered complaints about alleged stifling of competition in forecasting, and more recently, claims of lack of…

Bank reset

OPINION: Adding to calls to get banks to 'back off', NZ Agri Brokers director Andrew Laming has revealed that the…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter