Fonterra’s $3.2b capital return to farmers set to boost rural incomes and NZ economy
According to ASB, Fonterra's plan to sell it's Anchor and Mainlands brands could inject $4.5 billion in additional spending into the economy.
These other factors include strong UK supply and weak Chinese demand, the report says.
In the UK, the high pound is making British lamb expensive in Europe and thus more UK lamb staying put in its domestic market. At the same time, a push to buy local from supermarket chains is hurting prices of NZ imports, the ASB says.
On net, the ASB expects prices to stay under par for the rest of this season.A pick-up in demand next season is expected to lift prices to a more healthy level.
Beef and Lamb NZ's 2015 lamb crop report showed that the crop is the smallest in nearly 60 years. The number of lambs tailed this spring was down 6.7% or 1.73 million on the previous spring to 23.9 million head.
The drought led to fewer breeding ewes as well as a lower number of lambs per ewe.
All up, the smaller lamb crop should help support prices, however at the moment the lower NZ supply is being swamped by those other factors, the ASB says.
