AgriHQ senior analyst Mel Croad says a combination of growing demand as countries return to normal after covid, and demand for domestic livestock exceeding supply, has driven up prices.
Global demand has driven export prime meat prices to record levels, which are underpinning new season values.
AgriHQ senior analyst Mel Croad says average export beef and lamb values are at or close to record levels, having risen slowly and gradually each month, which reflects the improvements are market-driven.
“Exporters have done an excellent job to recover the downside in export values from last year over lockdown and in many cases they even managed to take prices to a stronger position,” Croad said.
“It really is a good news story.”
AgriHQ is forecasting some seasonal easing in prices in the coming months, but notes it will be coming off a higher level than recent years.
The average export value for NZ beef hit $8.46/kg in August, up from $7.70/kg in January and $1.03/kg higher than the five-year average for the month.
Lamb hit $12.30/kg in August, the highest level ever.
Croad says a combination of growing demand as countries return to normal after covid, and demand for domestic livestock exceeding supply, has driven up prices.
There are reports stock condition is about two weeks later than usual, which Croad warns could result in higher than usual demand for processing space in December and January.
“It’s not ideal close to Christmas, but it is a red flag to be aware of,” she said.
Alliance’s livestock and shareholder services manager Danny Hailes says forecast prices in the next two quarters will be higher than at the same time last season, driven by demand from North America and China.
“It is good news generally, better than last year,” Hailes said at a recent Alliance shareholder roadshow.
For South Island lamb for the period October to December, Alliance is forecasting a price range from $9.70/kg to $7.50; from January to March $8.30 to $7.10; and for mutton the range is $6.80/kg to $5.70 and $6.10 to $5.20.
For 55-day aged beef the forecast price from October to December is $7.20/kg to $6.30 and January to March $7 to $6; for handpicked beef $7 to $6.10 and $6.80 to $5.80; prime beef $6.20 to $5.30 and $6 to $5; and bull $6.10 to $5.20 and $6.10 to $5.
Venison forecasts are $7.20 to $6.10 and $6.50 to $5.40.
Asked how meat companies will stem the flow of livestock farms to forestry and carbon farming, Hailes told the roadshow it is incumbent on meat companies to be competitive throughout the season.
Chief executive David Surveyor told the virtual meeting that the direction of Government policy is clear.
“We are no supporter of an accelerated, artificial carbon price and see large tracts of farmland converted to pine plantations, but the Government should also accept and acknowledge the improvement of NZ farms, lower emission, water and fencing,” Surveyor said.
