NZ lamb production soars through the new season

03 March 2016

In December, the third month of the new season, lamb production in New Zealand (NZ) was 3% higher on year-ago levels, at 36,516 tonnes cwt (statistics New Zealand).

The North Island produced just over half of the national total, at 18,387 tonnes cwt (back 3% year-on-year). In contrast, production in the South Island increased on year-ago levels, up 10% to 18,129 tonnes cwt. Three months into the new season (beginning in October), lamb production has totalled 92,946 tonnes cwt – up 7% on the corresponding period the previous year.

NZ lamb slaughter reflected the slightly higher December production period – increasing 4% year-on-year, to 2.1 million head. For the first three months of the season, 5.1 million head have been processed – demonstrating a 4% jump on year-ago volumes.

As highlighted in the most recent mid-season update (Beef + Lamb NZ - BLNZ), export lamb slaughter & production are forecast to decrease 8% over the new season – totalling just 19.6 million head and 353,000 tonnes cwt, respectively. Unsurprisingly, this shift is largely reflected by smaller lamb crops, as well as an increase in the number of hoggets retained.

NZ lamb exports in December saw growth of 9% on the corresponding period the previous year – totalling 27,257 tonnes swt. This increase was largely underpinned by shipments to China and the UK, with volumes to the US easing year-on-year. Recent statistics have also indicated that the total exported volume has in fact increased (15%) in the first 4 months of the new season, suggesting a greater proportion of production is being exported this season. However, the growth in the volume of shipments has been somewhat offset by a slight decline in average value.

Reportedly higher domestic production levels in China, lowering sheep meat consumption levels in the EU, and a strengthening British pound (which is limiting UK sheep meat exports to continental Europe, resulting in extra lamb competing for the UK market) are some underlying factors contributing to an expectation of lower prices for NZ lamb in 2016, but a weaker NZ dollar may partly offset these factors.

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