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FoodAlert - Capturing Key Trends in the Global Food and Drinks Market

 Bright outlook for New Zealand lamb trade forecast 

Article Date: 06/08/2010 

 

Peter Duggan, Strategic Information Services, Bord Bia

According to the New Zealand Ministry of Agriculture and Forestry (MAF), they expect the outlook for the global lamb market to remain bright, as reduced worldwide and domestic sheep numbers should offset any reduction in consumer demand.

MAF anticipates New Zealand lamb prices will remain at relatively high levels over the coming year, on the back of the ongoing recovery in the global economy and lower overseas lamb supplies. In terms of trade, some strengthening in the New Zealand dollar against the Euro and Sterling has lowered returns into these destinations. Despite this development, New Zealand lamb prices since the start of the year have increased by almost 37% to €2.97 per kilogram.

The latest revised estimate released by BeefLamb NZ for New Zealand lamb production for the remainder of the 2009-2010 marketing season, which winds up at the end of September, indicates a fall in the region of 5% to 21.5 million head. The key driver behind this revision is the expansion in the dairy herd at the expense of the breeding ewe flock. The final  breeding ewe numbers released by Statistics NZ for the 30th June 2009 show a 480,000 head decrease on the previous estimate at 22.17 million head. More evidence of a slowdown in lamb output is the drop of 10% recorded in the number of lambs born as at the 30th June 2009 at 27.9 million lambs.

For the 2010/11 marketing season, MAF anticipates that New Zealand lamb production will start to stabilise. This reflects producers deciding to replenish breeding stocks by holding onto ewe hoggets in response to some renewed confidence within the sector. This has translated into lower ewe supplies for the six months ending the end of February 2010, which were down 16% on last years period.

New Zealand sheepmeat exports for the first half of the year are up 1% to 234,800 tonnes, despite exports to the EU and UK easing in response to strengthening currency movements. Reliance on these markets has declined somewhat with their combined market share down 7% to 69%. New Zealand have begun supplying greater volumes to Saudi Arabia, the US, Hong Kong and Taiwan, in particular.



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