Challenging conditions have impacted lamb growth rates.
By Genevieve Steven Agriculture analyst Agribusiness
The new season has kicked off, but not with the spring boost we had all hoped. On-farm conditions across the country are challenging, with most regions very wet, impacting lamb growth rates. In addition to slowed lamb growth, we’re seeing slowing demand in New Zealand’s key markets. The national lamb kill tallies are catching up, but still have a way to go. The processing industry made significant inroads on the lagging national lamb kill through the winter months, with slaughter numbers catching up to be only 3.1% behind for the same period in 2021 (538,000 lambs) at the start of September. The 2021 lamb crop was estimated to be 0.6% higher than the previous year by Beef and Lamb New Zealand, therefore a number of lambs are yet to come forward for processing. Lack of sunshine could boost the farmgate schedule. Wet conditions across the country are hampering efforts to finish lambs, therefore we could see increased procurement pressure through October as processors try to keep chains full ahead of the new season lamb crop. Processors will also be extremely mindful of keeping shifts operating at capacity, to incentivise and retain valuable staff as the season kicks off. The AgriHQ South Island lamb price climbed to NZD 9.55/kg cwt through the second half of September, supported by a low NZD against the USD, offsetting softening demand for lamb in New Zealand’s key markets. While export volumes to China in August were 21% higher compared to August 2021, there was no increase in export earnings. Ongoing Covid-lockdowns in China are impacting GDP growth, and pinching consumer spending. Additionally, the strength of USD vs. CNY is increasing the cost of importing sheepmeat. Exporters are reporting that they are starting to experience price resistance, evidenced by rapidly declining cut prices. The China lamb flap price took a dive in the last week of September, dropping NZc 60 WOW to USD 8.00/kg. For the same week in 2021, the China lamb flap price was NZD 9.20/kg.
