This year’s export lamb slaughter is forecast to reduce to 18.2 million, 850,000 less than last year and more than 1m lower than the five-year average. This is on the back of an estimated 1.2% reduction in the lamb crop to 22.9m.
Stats NZ this week warned the sheep flock fell 3% or 800,000 in the year to June last year and AgriHQ senior analyst Mel Croad says there is no sign of that shrinkage abating.
The country had 26m sheep as at June last year, Stats NZ agricultural production statistics manager Ana Krpo said.
“The 2020 drought caused feed shortages that led to a fall in total sheep numbers. Hawke’s Bay had the largest decrease, with the total number of sheep falling by 12% (346,000) from the previous year to a total of 2.5 million as at June 2020.”
Croad expects that decline to continue given the dry autumn over much of the country, forestry expansion and frustration with low wool prices and high mutton and lamb schedules encouraging farmers to dig deep into their flocks.
She warns this trend will also accentuate the challenge of managing exports of prime lamb, an issue that appears to be causing some issues for meat companies this year.
Croad says based on the number of lambs slaughtered to mid-April and Beef + Lamb NZ forecast stock numbers, there are at least 1.1m fewer lambs left to slaughter this season compared to last, which would create a shortfall for meat companies over the balance of the season.
A 30-40c/kg lift in the schedule in the last two weeks indicates meat companies are aware of a pending shortage.
The AgriHQ South Island lamb indicator has reached $7.00/kg and the North Island it’s $7.40/kg, 60-90c/kg higher respectively since the first quarter of the season.
“With export prices rising, we are seeing a corresponding lift in farm gate prices.”
Croad says the South Island lamb season began with a rush and is about 450,000 ahead of the same time last year, whereas the North Island kill has been slower.
The data from Stats NZ also shows beef cattle numbers increased in the last four years, following a decade of steady decline.
“Since then (2016), good beef prices provided buoyancy to the industry and, between June 2016 and 2020, the total number of beef cattle increased by 10% (350,000) to 3.9 million,” Krpo said.
Just over two-thirds of all beef cattle are farmed in the North Island.
The dairy herd has fallen 7% (400,000) since 2016 to 4.8 million, as at June 2020.
