Red meat exports slump, thanks to China
Weaker pricing and demand from China continue to impact New Zealand red meat export earnings.
Lamb export receipts reached a record high of $677 million from October to December 2017, up 47% on the same period in 2016.
The average FOB value in this December quarter equalled the record set in the December quarter of 2011 at $10,460 per tonne – up 22%.
New Zealand beef and veal exports generated $588 million in the first quarter of the 2017-18 season, up 29% compared with the same period last season and the second highest on record for the December quarter – only behind the 2015-16 season.
Analysis by Beef + Lamb New Zealand's (B+LNZ) Economic Service shows the record was driven by high export volumes and average Free-on-Board (FOB) per tonne at record values for lamb and mutton, and near record values for beef, while the New Zealand dollar has remained relatively strong.
Andrew Burtt, B+LNZ chief economist, said lamb and mutton farm-gate prices were up 30% and 59% respectively for the first quarter of the season (October-December 2017) compared to the previous season. Cattle prices were relatively steady – up 5%.
“Average value per tonne for exports started at a high level after strong growth during the 2016-17 season and have remained strong despite higher processing volumes so far in 2017-18.
“Dry conditions led to an increase in New Zealand sheepmeat, cow and bull production over the first quarter compared with the same quarter in 2016-17, but similar to production in 2015-16.
“The 2016-17 season started slowly due to generally wetter and cooler weather and livestock were harder to finish, but good pasture availability reduced pressure on farmers to sell.”
While production was high in the first quarter of the 2017-18 season, in its 2017-18 New Season Outlook, B+LNZ’s Economic Service forecast that lamb and beef production would be about the same as in 2016-17, but mutton production would be down 9.1%, he said.
