A severe shortage of stock is now hitting home, as companies compete aggressively for numbers throughout NZ.
With the slow spring and big stock losses at lambing, competition for stock has started early, and all firms are desperately trying to maintain their share and utilise the over capacity of the meat processing industry.
With meatworkers predicting the worst season ever because of changes in land use and lack of stock, the only determinant to continuing high prices will be the weather.
Many areas are now reporting that feed that should be at peak has not arrived, and rain is desperately needed if stock are to be finished to maximum weights and price.
Weaning hasn't even started and meat companies and stock agents are engaged in a savage procurement war which has pushed the price of store lambs to over $70 and old ewes to $80. Questions are now being asked what price prime lamb will reach, given the impact of already declining sheep numbers has been accentuated by the death of up to 1.5 million prime lambs in September's storms. In September, Beef and Lamb New Zealand forecast a 17.4kg prime lamb would be worth $82 this season, the same as last season's return, but given the extreme store lamb price and the impact of the storm there is speculation this year's price could be pushed towards $100.
All meat companies appear to be actively buying store stock, offering $2.50 to $2.60 a kilogram for lambs capped at 32kg liveweight for supply in December and January. The price is increased to $2.65 to $2.70 if contracts are signed directly with a meat company and not via a third-party stock agent.Information gathered by the Otago Daily Times reveals ewes and lambs all counted are selling for $65 to $75 and old ewes are making $3.50 a kg in the South Island and $4 a kg in the North Island, making some worth a previously unheard of meat price of $100 each. It appears all meat companies and stock firms are active and one long-serving agent, who asked not to be named, said industry ethics were being discarded.
Dunedin farm accountant Richard Farquhar said having previously being told the high dollar was limiting the price companies paid farmers for stock, soaring store stock values did not make sense.
Lamb trader Grant Ludemann said Silver Fern Farms' Lamb Plan scheme set the store lamb price, which opened at $2.50 but quickly rose to $2.60 a kg. Store lamb prices were traditionally high at this time of year, driven by the prime market, but he agreed it was accentuated by external factors such as falling sheep numbers and the impact of lambs which died in the September storm.The store lamb market had changed in recent years, with lambs that were once killed at 16kg now put through Lamb Plan-type systems for finishing to higher weights.
2 Comments
Nice work AJ , hope my first draft will make a hundy as well but thats not for another month. I cant see prices falling away too much personally as the above article indicates. There is just not enough supply to match demand. The meat companies have rebuilt their balance sheets over the last couple of years at the expense of us cockies, it is now time for us to see abit more.
I dont have too much of an issue with the European market tipping over. Remember 90% or so of their population is still employed and lamb is now a luxury product which the importers and supermarkets have had obsene margins on. I see Sainsbury's have had a bumper year again which is where most of my lambs end up so they have some fat in their system to meet the market. Also the demand from emerging(mainly Asian) markets is increasing dramatically so we have the whip hand for once. Maybe the glass is half full AJ!
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