NEW Zealand’s exporters continue to feel the pressure from product shortages of both lamb and mutton, and they know that the situation isn’t going to improve this season. Any available product is being prioritised to fill long-term customer contracts, with few new orders able to be accepted.
Prices for most cuts remain stable, as there are limited new orders to reset price levels. The New Zealand domestic market is keeping upward pressure on pricing of the lower value cuts.
However, most commentators believe that if retail prices follow the direction of wholesale prices, consumers will make a rapid shift to alternative cheaper sources of protein.
Parts of the country are drying out fast and retaining lambs to higher weights is no longer a viable option for some North Island’s farmers.
Soil moisture readings vary from region to region, but the Hawke’s Bay is the hardest hit, with current soil moisture levels 26 per cent behind the average for the same week over the previous five years, and a whopping 45 per cent less than the same time last year.
The Wairarapa and Waikato regions are also following a similar but less severe trend.
However, the data suggests that the South Island is in a better situation, with current soil moisture levels for most regions slightly above the five year average for this time of year, but things are drying out fast.
Meat processing company schedule prices this week are steady to down 5c/kg in the North Island, making a 19kg YX lamb worth an average of $105 net.
In the South Island prices range from steady to up 10c/kg, making the same lamb worth $102 net.
BEEF
The export beef market remained quiet again last week, with US 95cl bull easing by US1c/lb to US128c/lb and US 90cl cow slipping to US119c/lb from US120c/lb. US buyers continue to cover their short term requirements by relying heavily on the spot market.
Many are hesitant to lock orders in advance as the New Zealand cow kill for the season ploughs ahead of its five year average by 10-15 per cent. This downward pressure will shortly be further compounded by the next round of the US dairy herd buyout programme.
Meat company schedule prices this week range from steady to up 10c/kg in the North Island on last week and generally steady in the South. A 180kg cull cow is currently averaging $365 net.
VENISON
European importers of New Zealand venison continue to show hesitation in the marketplace due to ongoing economic uncertainties. However, it has been reported that cuts into Europe are holding relatively firm so far.
Sustainability seems to be the word resonating through the New Zealand venison industry currently, as many become concerned over the shrinking national herd size.
The smaller volume of product could be detrimental to the relationships that exporters have worked so hard in cultivating with buyers, if they cannot meet client needs in terms of quantity being supplied down the track.
The past two weeks have seen the average schedule price plateau at around $8.61/kg. However, based on market sentiment NZX Agrifax predicts prices will continue to rise and end up in the vicinity of $10/kg during August and September as the demand for product peaks.
• NZX Agrifax: 04 495 2807 www.nzxagrifax.co.nz
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