Demand is generally reported as stable to strong.
Britain and the European Union are still lagging a bit given continuing hot weather but there still appears to be an appetite to buy.
China continues to be a solid market with demand and prices firming, underpinned by Chinese New Year and lower Australian supply.
“Most exporters agree for demand to be sustained prices need to come back from the high levels seen in recent months, particularly in Europe.
“There’s also the seasonal downwards trend associated with the switch to frozen sales and increasing production out of New Zealand, however, there does appear to be some variance between NZ exporters with just how much they consider the market needs to ease.”
There is a large difference in export prices between exporters but those at the top end of the price range successfully moving product in good volumes suggests there’s no need for the lower prices to be accepted by NZ exporters.
“Past experience tells us that once lower prices are accepted in the market they can all too soon become accepted as the norm by our customers.
“Exporters appear to be determining just where that new pricing level will sit.”
Reports from exporters portray a steady and largely positive outlook for lamb demand.
China continues to be a major driver of market direction for NZ sheep meat.
Meanwhile, with good winter growth rates pushing more old-season lambs into the works earlier than usual there’s talk of a hole developing between the old and new seasons for the South Island lamb kill.
“But at this stage it’s talk, it’s not happening yet,” AgriHQ analyst Reece Brick said.
“This has come at a time when more and more capacity is coming on stream, causing the odd spot premium to appear in the market.”
But on average schedule prices are dropping about 10c/kg a week with last week’s prices in the $7.70-$7.80 range.
Lamb schedules have dropped 30c/kg from their peak in mid September in the South Island and 40c/kg in the North.
“This easing comes much earlier than typical for lamb prices, driven by solid supply of old-season lambs and very high procurement rates,” Brick said.
It’s still mostly dead quiet on the store trading front.
“Later-born wool breed hoggets are still accounting for the majority of what is being sold but new-season lambs are slowly appearing in minute numbers.”
In the North heavy old season lambs continue to keep processing chains busy with solid bookings for the next few weeks.
The mix of new-season lambs is increasing week by week with weights revealing the very good start to the season for early lambing farmers.
Prices continue to ease across the board with $8-$8.10/kg pretty much the common range last week for old-season lambs.
Some companies are paying a premium for new season lambs but it is not expected to last.
