What’s ahead for the NZ lamb industry?

24 September 2015


Beef + Lamb New Zealand have released their New Season Outlook for 2015-16.

For the year to 30 June 2015, the New Zealand (NZ) sheep flock decreased 4.1% on the previous year, to 28.6 million head. Both breeding ewe and hogget numbers were lower, driven by land use change towards dairy and drought conditions in the North and South Islands. 

As a result of fewer breeding ewes, as well as an estimated decline in the average lambing percentage, the lamb crop for the 2015-16 season (year ending September 2016) is projected to total 23.8 million head – back 7.2%, or 1.8 million head, on the year before.

Beef + Lamb NZ report that scanning results indicate the average lambing percentage will fall 2.6 percentage points in 2015-16, although conditions during spring lambing will be a large determinant of the lamb crop.

For the year ending September 2016, Beef + Lamb NZ forecast lamb slaughter to be 7.4% (1.6 million head) lower year-on-year, at 19.4 million head. This reflects higher than expected production during the previous season and a reduced lamb crop. Greater hogget retention is projected cause a slight flock recovery for the year ending June 2016.

With the assumption of a return to normal climatic conditions during 2015-16, the average lamb carcase weight is expected to increase to 18.2kg. This rise will slightly offset lamb production, which is forecast to reach 354,600 tonnes carcase weight (cwt) for the coming season – back 6.3% year-on-year.

Beef + Lamb NZ report that lamb exports during the 2014-15 season (year ending September 2015) provisionally increased 1.9% year-on-year to 313,000 tonnes shipped weight (swt) – underpinned by a rise in production in the latter half of the season. The value of lamb shipments are forecast to lift 2.7% over the same period, to $2.88 billion FOB (Free on Board), supported by the depreciating NZ dollar.

Looking ahead, Beef + Lamb NZ estimate lamb exports to reach 293,000 tonnes swt in 2015-16 – down 6.3% on the previous year.

Beef + Lamb NZ expect China to remain NZ’s largest sheepmeat (lamb and mutton) market in 2015-16, although volumes will be lower than the highs of 2013-14. The report suggests that Chinese sheepmeat production is increasing at 2.5% per annum, while consumption growth is estimated at 3.4% – a scenario resulting in higher prices which has incentivised Chinese producers to lift domestic production.  Local Chinese production is quite competitive with imported products, so demand for sheepmeat from China is significantly impacted by the availability of domestic supplies. As such, domestic inventories in China have reportedly been high over the past few months, which have seen NZ shipments lower than year-ago levels.

Similarly, sheepmeat production in the EU has recovered, mainly driven by increased production in the UK with the expansion of the breeding flock.  This has resulted in reduced NZ lamb shipments to the UK (NZ’s largest lamb export market) during 2014-15, although lamb exports to smaller European markets, such as Germany, the Netherlands and Belgium have registered growth.

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