North Is. lamb kill lifting off seasonal lows

The latest kill numbers show a 14% lift in slaughter rates in the North Island week on week. Current kill rates are running around 5% lower than last year and 10% below the 5yr average. Meat companies tend to be able to rely on a decent supply of old season's lamb at this point in the season as farmers need to drop these lambs before they teeth are up and they are classed as hoggets.

Farmgate lamb prices edging higher

Lamb prices at the farmgate in both islands lifted this week by between 5 and 15c/kg. Meat companies are coming into the chilled Xmas supply period for the UK market in particular and will be looking to secure supply. Competition from the local trade market is also pushing prices higher and with more capacity due to come on stream, processors will be keen to see the lambs keep flowing. 17kg carcass weight lamb is currently in the $5.70 to $5.85/kg range in both Islands (on a gross basis).

Overseas lamb market remains soft

Demand and pricing from key overseas markets continues to be soft - particular for frozen product. The high dollar and cheaper supplies of Australian lamb are contributing factors. The Christmas chilled trade will provide more of a bead on likely market conditions for the coming season. Some meat exporters are reporting that stocks of frozen lamb they are carrying into this season are relatively low compared to recent years. This provides some hope for market prospects this season however a significant lift in lamb pricing is not expected in the near term.

Store lamb market settles back

Demand for old season's store lambs is falling - as is usual at this time of year. Paddock prices for 35kg male lambs are ranging around the $2.70 to $2.80/kg mark in both Islands. Relative to lamb schedule prices the store market remains high but it is starting to come back into line with last year levels. Store lamb prices tend to drop significantly as a percentage of schedules through to December as the supply of store lambs increases sharply.