"The UK lamb market is slowly becoming less pivotal to NZ exporters," AgriHQ analyst Reece Brick said in his monthly Sheep and Beef report.
"A steady decline in lamb consumption combined with a loss of economic confidence following Brexit has resulted in a challenging market environment.
"Exporters have largely chosen to divert their product to higher-paying markets and this will be a strategy that increases over time."
Just 1274 tonnes of frozen lamb made its way to the UK from NZ in August, the lowest monthly volume since AgriHQ records began in December 2006.
In July and August NZ frozen lamb exports to the UK were down 32% on a year ago and were 38% behind the five-year average, AgriHQ said.
Similarly, NZ lamb exports to continental Europe fell 11% to 2946 tonnes in August, the lowest level for the month since AgriHQ records began in 2006 and 22% behind the five-year average.
NZ exporters have focused on the chilled trade to the UK, which is still achieving very solid prices, Brick said.
Prices for chilled lamb for the Christmas trade were expected to be ahead of last year as customers sought to secure product following scarcity of supply last year, he said.
Prices in the UK and continental Europe were likely to adjust as supply from NZ increased and production reverted to frozen but would still remain at historically high levels. – BusinessDesk
