LAMB UPDATES | Cracks appear for lamb prices as pressure mounts

Some meat companies pulled back schedules in both islands this week – at a time when prices are usually rising seasonally. The NZ dollar continues to strengthen against the Euro in particular. NZ exporters are also reporting the market conditions remain very subdued in our main UK and European markets. Frozen stocks of lamb remain large although chilled lamb is moving more freely. Typically farmgate prices for lamb lift by 60-70c/kg between Jun and the seasonal price peak in Nov. Based on the current situation and outlook this is looking very unlikely this year.

Store lambs too dear

There is a growing sense of unease in the export lamb market but this is not having much of an effect on the store lamb market as yet. Prices for store lambs have continued to defy the odds this season as strong demand has thrown sense out the window. As a percentage of works prices, store lamb prices in the paddock are at close to 50% - where-as they are usually 44-45% according to last year and the five year average. This suggests that 35kg store lambs are about 20c/kg overvalued. Lamb finisher margins will be very tight as a result.

Even more money at North Island saleyards

Paddock prices for store lambs were generally steady last week. 35kg lambs continue to hover around $2.80/kg. It's a different story at the saleyards, with prices passing that easily. At Stortford this week, there was plenty of optimism from the bench which saw buyers bid over $3.00/kg for most of the male lambs 36kg and under. Male lambs 32-34kg averaged $3.24/kg while 35-37kg types were $3.05/kg. 33kg lambs were trading at $3.20/kg. Nearly 10,000 lambs were yarded at Feilding today with the market lifting again by around $5/hd! 35-37kg male lambs were just shy of $3/kg. 38-40kg male lambs were also firmer on $2.96/kg.