Changing consumer demand and the lower cost of producing frozen meat means just 6000t of chilled lamb was exported during October and November.
In the past two years 9000t of chilled lamb was exported over that same period, and five years ago the volume was close to 12,000t.
The volume of chilled exports last November as a percentage of all lamb exports actually halved from 20% to 10%.
“Total November export volumes were the lowest in six years despite heavier slaughter rates through this period,” said AgriHQ senior analyst Mel Croad.
She said returns for frozen meat have started to fall but ongoing shipping disruption and the higher cost of processing chilled product means a heightened risk for exporters.
“Frozen prices have fallen back to May 2021 levels but they come with less risk while consumers are steering clear of high-end product due to global inflationary pressure.”
A sharp $2.05/kg decline in the average export values between last October and November reflects the speed with which international prime lamb markets have weakened.
Croad said average values fell from $12.90/kg in October to $10.85/kg in November, a decline that dwarfs drops over the same period in 2021 of 40c/kg and 20c/kg in 2020.
Between September and November last year, the value of flaps to China alone eased $2/kg.
“It’s well off the covid recovery peak we saw from July 2021 to September 2022 when the average export value for lamb sat from $12/kg to well over $13/kg.
“This drop is one of the quickest we have seen, taking average export values to a 17-month low.
“This explains why farmers have felt acute pain at the farmgate level as processors scramble to realign prices to significantly lower market returns.”
While export prices have fallen, China remains a key lamb market, taking 60% or close to 13,000t of New Zealand exports in November.
“This is a year-on-year lift of 21%, which reflects their stronger buying power compared to other key markets.”
