New Zealand sheep farmers should cash in on the continued global decline in lamb numbers, but the wider industry is not immune from its effects.
Further meat worker job losses were reported in the Hawkes Bay this week, as the Bernard Mathew's Waipukurau plant closed, with the loss of 175 jobs due to a shortage of lambs, bringing redundancies for the week to more than 300.
A smaller than expected lamb kill this year also prompted Silver Fern Farms this week to announce the likely loss of 135 workers with the closure of its lambing cutting facility at the Canterbury plant.
The planned shift of the company's rendering and casing facility from its beef works at Belfast to Timaru cost a further 39 jobs.
Earlier, Affco announced its Wairoa plant would close for an extended period over winter because there were no sheep to kill.
This year's lamb kill in New Zealand could be 5.4% lower than last year, at 21.5 million, compared with a forecast kill of 23.5 million, but it is the same everywhere in the world.
In the first four months of the northern hemisphere season, production in the United Kingdom was back 16% on last year, Ireland's back 15% and Spain's 3%.
France, where production was up 2%, was the only country to have a higher kill.
The executive director of Meat and Wool New Zealand Economic Service, Rob Davison, said all indications pointed to a global reduction in lamb numbers which would keep international prices high.
"By and large, on the supply side, it looks like less than last year," he said.
Mr Davison said it appeared the shift in land use in New Zealand from sheep farming to dairying, dairy support and cropping was greater than his organisation had allowed for.
Four years of drought on the North Island's eastern coast had also had an effect, but he said there also appeared to be some flock rebuilding, with farmers retaining ewe lambs, which would have reduced the lamb kill.
Looking ahead, Mr Davison said it appeared the number of lambs available for killing next season would be similar to this year, but that depended on weather conditions during lambing in spring.
A declining flock may put extra pressure on processing companies to buy throughput, by paying farmers prices which were not related to the market.
An early market forecast by the National Bank is for prices paid by meat companies next year to be similar to this season, at about $80 for a 17.5kg animal.
Mr Davison said while market prices might remain strong due to low supplies, the exchange rate had the biggest impact on returns to farmers.
