WHILE lamb producers in New Zealand are welcoming values 180 NZ cents per kg above year earlier levels, the phenomenal prices witnessed in the UK this season means NZ lamb is still proving more competitive on the British market. 

With the price in the Southern Hemisphere country for the week ended March 24 sitting at 710 NZ cents per kg – currently just under 180c above year earlier levels and almost 215c above the five-year average for this time of year – as GB average during the same period at 529.2p per kg (and rising further to 236.7p for the week ended March 31), the gap between the two prices is growing which makes New Zealand lamb more competitive on the British market. 

As expected, following reports from Beef and Lamb NZ that New Zealand had fewer lambs left available for slaughter compared to year earlier, New Zealand production of sheep meat in February declined 20% (12,700 tonnes) month-on-month, to 51,900 tonnes, according to the Ministry of Primary Industries. Compared to production in February, 2017, production declined by 15% (9100 tonnes). 

This was backed up by Quality Meat Scotland's director of economic services, Stuart Ashworth, who said: “Slaughter statistics from New Zealand suggest that between October and the end of January they killed 10% more lambs than last year, although their January kill struggled to match year earlier levels.

“Not surprisingly New Zealand saw some growth in exports over this period, but the latest data suggests that the volumes exported in February failed to match last year.”

Mr Ashworth also stressed that the growth in exports from New Zealand was not to the UK, where the volume shipped between October and February was little changed, but to China and some mainland EU countries like Germany and France.

France reported lower slaughter volumes throughout the autumn and into 2018 which led to increased imports initially from Ireland and New Zealand but as 2017 drew to a close the UK also increased deliveries. The UK also saw growth in exports to Germany and Belgium.

“Once again we see the importance of European Union customers to the market for Scotch and UK lamb,” said Mr Ashworth. “Europe also sees a lift in demand for lamb over the Easter period which will have supported prices there, but the decline in French production in particular, which for the first half of 2018 is estimated to be 2% by French sources. This suggests that there will continue to be a demand in key European markets for sheepmeat this year.

“In addition to this, the high farmgate prices in Scotland and the UK has clearly drawn hoggs onto the market which may mean supplies become tighter through April and May and the likelihood that despite cooling farmgate prices will remain firm,” he concluded.