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3 Fonterra shrinks forecast Vol 20 No 48, December 12, 2022
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Lamb price hits the skids Neal Wallace
MARKETS
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Beef and lamb
HE speed with which new season prime lamb prices have fallen below $8/kg has surprised a market analyst. The AgriHQ indicator price is now $7.95/kg in the South Island and $7.90/kg in the North Island, falling from a range of $9.55$9.60/kg at the start of October. The price is over $1/kg lower than at the same time last year, reducing the value of a 17.5kg cwt lamb by between $17 and $22 a head. AgriHQ senior analyst Mel Croad said export lamb prices rose to record levels as economies emerged from covid restrictions, but she is surprised at the speed with which they have fallen. It reflects weaker international lamb markets – and Croad fears prices could ease further. Analysts had been forecasting prices to bottom out at $7.50$7.60/kg in February-March. Croad said they could be at that level by Christmas as the seasonal lamb kill ramps up, putting even more pressure on subdued markets. “I’ve never seen this amount come out of schedules in such a short time and at this stage of the season,” said Croad. “Every market has weakened almost simultaneously and this time we don’t have China as a backstop.” Confronted with inflation, consumers are reducing their spending or buying cheaper cuts,
and demand in China is hindered by lockdown policies to control Covid. “However, that could change as China makes sweeping changes to their covid-zero policies this week,” said Croad. Compounding the problem has been a strengthening in recent weeks of the US-NZ exchange rate from US56c to close to US64c, reducing values in NZ dollar terms.
I’ve never seen this amount come out of schedules in such a short time and at this stage of the season. Mel Croad AgriHQ Greater volumes of Australian lamb are also competing for market share. A year ago a New Zealand lamb leg in the UK was selling for £7/ kg. It is currently selling for £4.75/ kg. The reduction has been less in Europe, at €7.70/kg compared to €6.55 at present. A year ago in China, lamb flaps were making US$9.45/kg. Currently they are averaging US$6.20/kg. The AgriHQ indicator price for mutton has similarly fallen. A year ago it was $6.50-$6.60/kg but this year it is $4.25-$4.35. Croad said fortunately an abundance of feed is giving farmers options by reducing the need to quit stock. Continued page 3
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MARKETS 5
Astra Farms’ young star on the rise Estee Browne, who was named Beef + Lamb NZ AgResearch Emerging Achiever at the recent awards, doesn’t consider herself anything exceptional.
PEOPLE 22 Feds leader says intensive winter grazing consent is seen as bureaucratic exercise that adds little value.
Government signs contracts that will in time bring better connections to 30,000 households and businesses.
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NEWS 7
TECHNOLOGY 11
WORLD 26
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