Exchange danger for lamb

A strengthening dollar exchange rate could spoil the party for what should be a second consecutive year of healthy returns for sheep and beef farmers.

Silver Fern Farms chief executive Keith Cooper told farmers at a field day near Gore last Thursday that while prospects were bright, the exchange rate was closer to 2008 levels than 2009.

While there was time for it to fall and not be disruptive, Mr Cooper said there was some nervousness.

Lamb prospects remained bright and European retailers were investing heavily in lamb, to increase its availability.

Mr Cooper said while there was little likelihood retail prices would increase, equally, they should not fall.

He said he was "relaxed and confident" about beef prospects, with prices cyclical but trading within a band both for manufacturing beef to the United States and prime cuts to Asia.

Venison was causing some concerns.

Mr Cooper said it was "on a cusp and could tilt one way or the other".

Prices had reached a record high from a lack of wild venison, due to wild weather decimating stocks a year ago, and falling numbers of New Zealand farmed deer.

Venison was still selling but orders from European buyers were slow and it was vital prices were not pushed higher, he said.

He urged farmers to think carefully about their kill profile because of that.

Prospects for by-products were also flat, due to the economic crisis softening demand for luxury products.

Mr Cooper said there had been a noticeable shift in the way the managers of major retail chains interacted with red meat suppliers, especially those who had changed the type of product and the way they supplied.

"They are buying us the beer rather than the other way round," he said.

Retailers wanted an integrated supply chain that linked consumer demands and wants with suppliers of that type of product, so consumers felt a connection to the farm.