It’s been an interesting season for lamb. For those in the finishing game it’s been a long, drawn-out season starting with sub-par growth rates in spring.
Then came processing delays early in the year due to Omicron. Since then both factors have jostled for bragging rights.
Now as we enter the pointy end of the processing season, it’s worth coming up for air and taking a look at how far the lamb kill has come.
The beauty of this is that it gives those holding onto winter trade lambs a bit of an insight into how the remaining months of this season might pan out.
Slaughter data covering the first 40 weeks of the processing season to July 9 shows this season’s lamb kill has clawed back some ground against last season.
In the North Island, lamb numbers have just ticked over seven million head. This compares with last year’s tally of 7.59m head but remains well off the pace of the five-year average by at least 860,000 head.
The South Island takes line honours overall, having processed over 1 million more lambs than the North Island this season, at 8.1 million head.
Again, this is off the pace of last season and the five-year average, but the gap isn’t as wide as the North Island’s.
Current slaughter stats to July 9, combined with Beef + Lamb NZ projections for this season, provide a glimpse of what the remaining lamb kill could look like.
On this basis, the remaining lamb kill in the North Island to the end of September is looking very top heavy, and potentially unachievable based on ongoing staffing challenges.
This could lead to even longer delays in getting lambs away for processing than we are already facing.
In the South Island, the issue doesn’t seem so pointy. The remaining lamb kill, based on the above method, suggests numbers left to process are in line with recent years and look achievable.
Over the remainder of July, lamb slaughter rates reportedly remained higher than 12 months ago.
Red-hot market conditions a year ago kept lambs out of the processing plants as finishers eyed up better returns further down the track.
One could argue the merits of doing that again this year, but that needs to be weighed up against the risk of having more lambs left to process than in recent years. And an export market that has very little more to give.
Through the first few weeks of August lamb processing rates will again reduce, this time due to the need to process peak bobby calf numbers. This will right itself towards the end of the month. But that will leave roughly four to five weeks of the current processing season to go, tightening the window to get lambs off farm and into processing plants.
The spillover of winter trade lambs for processing into October continues to grow each year as traders look to maximise margins.
While this helps spread the flow of lambs, the risk of lambs cutting their teeth increases.
This occurs even in a normal processing year void of staffing challenges and restricted capacity.
So, the risk this year could be even greater, especially if some come up against unexpected delays in getting lambs away.
It has been stressed plenty of times that lambs that aren’t already attached to any sort of supply agreement with their processor could be sitting ducks in terms of securing space once we start to see a rush of lambs from late August. One would question the need to test this theory.
This article was written by AgriHQ analyst Mel Croad. Mel’s reports provide key insights into what makes our sheep and beef markets tick. Subscribe to AgriHQ reports here.
