Westpac economists predict rising prices for meat.
Lamb prices in the UK have gone up 34% in the past year and in the US beef prices have risen $21%.
Drought and dairy conversions have lowered the number of breeding sheep here and drought in Australia has also lowered the supply of lamb in international markets.
“We expect stronger world prices and forecast farmgate lamb prices to average 439c/kg over the 2008/09 season, up from an estimated 383 c/kg this season,” the bank’s economists said.
This included an average exchange rate for the NZ dollar of 0.37 pence against the pound sterling, and 0.49 euros against the EU currency through the 2008/09 season. Beef prices are also expected to rise.
“We forecast NZ bull beef prices to average 336c/kg over the 2008/09 season, up from an estimated 316c/kg this season,” the economists said.
I haven’t noticed the price of meat in supermarkets matching the low prices farmers have been receiving in the last couple of years. But rising international prices will impact on domestic prices – and what’s the bet some misguided person or party then starts calling for subsidies.