Lamb outlook good until early 2019: report

Buyers inspect lambs at the Maniototo Last Muster lamb sale earlier this year. Photo: PGG Wrightson
Buyers inspect lambs at the Maniototo Last Muster lamb sale earlier this year. Photo: PGG Wrightson
Overall global demand for lamb remains positive, and will help  underpin strong schedule prices until at least early 2019, Rabobank’s  agribusiness report for this month says.

Processors had used the increasing supply of new season lambs as an opportunity to pull schedule prices back to levels that closer reflected in-market returns, the report said.

At present, the schedule price in the North Island averaged $8.10kg/cwt, while South Island lamb averaged $7.75; both were 4% lower month-on-month.

While that price decline was occurring slightly earlier in the season than would normally be expected, given prices were coming off historically very high levels, the early decline would help  offset potential sharper price drops in December-January, when lamb supply volumes lifted significantly, the report said.

Rabobank expected some further downward price movements over the next month due to chilled premiums coming off, and volumes of lamb supplies building up towards Christmas.

The Chinese market continued to perform strongly and buyers were building supplies for Chinese New Year celebrations.

Demand from the US also remained strong,  tight supplies from Australia having benefited New Zealand exporters in that market.

A very hot summer in Europe had some negative impact as reduced consumption rates had led to rising inventory levels.

Despite that, prices received for New Zealand’s Christmas chilled lamb product were reported to be in a similar range to  last year.

The last shipment of chilled product had now sailed and production would largely revert back to frozen product.

The strength of demand from the European markets beyond Christmas would depend on how quickly they were able to move the stocks that had been built up over their summer.

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