Mecardo Analysis - Kiwi’s have fewer lambs but most still to come
- By: "Farm Tender" News
- Ag Tech News
- Jan 15, 2019
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By Angus Brown | Source: MLA, Beef and Lamb NZ, Stats NZ.
Part of the reason for the improving lamb prices over the past five years has been a case of increasing demand clashing with weakening supply. Supply from Australia has been increasing, but our main competitor, New Zealand, has continued to see lamb supplies decline. Most of this year’s supply from across the ditch are still to hit the market, however.
Back in November, Beef + Lamb New Zealand released their ‘2018 Lamb Crop’ report. The trend of a declining ewe flock continued, with the number of ewes joined falling 2% to 17.375 million head. Better lambing percentages partly compensated for the lower number of ewes joined.
The Kiwi’s lambing percentage went from 127.3% in 2017 to 129% in 2018 This easily outstrips Australian lambing percentages, which at their best for crossbred ewes sits at only 110-115% on a nationwide scale.
Figure 1 shows the decline in the New Zealand lamb crop. This year the NZ lamb crop fell 0.7% to a 64 year low of 23.515 million head. Over the course of the last fifteen years, the New Zealanders have cut the number of lambs marked by 29%, or 9.7 million head.
Increasing productivity has seen NZ lamb slaughter fall by 21% over fifteen years. This has actually been more than matched by a 35% increase in Australian lamb slaughter. The total lamb slaughter for the two countries is up by around 1 million head over fifteen years.
We know that this year any decline in NZ lamb slaughter is likely to clash with lower supplies from Australia. However, Figure 2 shows that 69% of NZ lambs are slaughtered between December and May, so the coming months will provide the most competition for our lamb exports.
When in the next 3 to 4 months NZ lamb supply hits is hard to say. The five-year average shows most come in the January to March period, but last year supply was more evenly spread through to May.
Key points
* The New Zealand lamb crop for 2018 is expected to be at a 64 year low due to lower ewe joinings.
* New Zealand lamb supplies increase in the first three months of the year, which could see weaker export demand for Aussie lamb.
* When NZ supplies weaken in autumn there will be strong pressure on export prices.
What does this mean?
New Zealand lamb slaughter is likely to be slightly lower this year, providing a little less competition in our export markets. Most of New Zealand’s lambs are yet to hit the market, however, and might limit price upside, especially for export lambs over the coming months.
May to July could again the really troublesome months for world lamb supplies. New Zealand tapers off and Australian supplies are unlikely to last that long.
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