Friday, December 8, 2023

Lamb prices expected to remain lower

Neal Wallace
An offer of $8.35 a kg for lamb being offered by one exporter in the North Island is not a precursor of prices to come this season, warns an industry analyst.
Reading Time: 2 minutes

Meat exporter Taylor Preston is offering that price for lambs 16kg cwt and less, which AgriHQ senior analyst Mel Croad says appears to be targeted at a special order.

She warns pricing prospects for the new season will be lower and uncertain.

“It’s likely to be a short-term offer and lucrative enough to present that pricing level to farmers, but it is not indicative of the new season,” she said.

“That offer, however, does not appear to be raising expectations.”

Croad says her message for the past four to five months remains unchanged, that new-season prices will not meet the heights of last year.

“I think people are cottoning-on to this,” she said.

While not espousing doom and gloom, Croad says indicative new season pricing by meat companies is lower than last year.

One North Island minimum price contract being offered recently, had early November prices at $7.20/kg, but in the three weeks leading up to Christmas prices were lower at $6.90/kg.

“There is no talk about the market post-Christmas,” she said.

This reiterates the uncertainty of the coming season.

However, average export values for New Zealand lamb received during August were surprisingly high at $10.47/kg, up from $9.61/kg in July.

“That was a really strong value for August,” she said.

During the month, 15,400 tonnes of lamb was exported, consistent with the five-year average, but the average August price was lower than for the previous two years. 

Average export prices for September will not be known until the end of October.

Mel Croad | October 06, 2020 from GlobalHQ on Vimeo.

An indicator of the season’s prospects will be the demand for chilled lamb between October and December.

Croad says Chinese customers are continuing to favour frozen meat imports instead of chilled, noting frozen product gives them greater versatility should the covid-19 virus return.

Retail demand for chilled lamb has stayed relatively high, but exporters are telling Croad supply contracts for Christmas are taking longer to confirm.

Last year’s farm gate prices were an anomaly and a repeat this year is unlikely, evident by the absence this year of the traditional weekly lift in values through August and September.

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