Fewer ewes but more lambs expected

It’s less than 20 years since New Zealanders had more than 20 sheep each – there more around 70 million sheep and only 3 million people.

The human population has risen to more than 4 million and the ovine population is now around half what it was at its peak so we now have fewer than 8 sheep each.

Meat and Wool New Zealand’s latest survey  records a total sheep population of just 33.14 million.

The ewe population has dropped 3.4% in the past year to 22.7 million, the lowest since 1951-52. The number of hoggets dropped 2% to 9.4 million.

The decline in numbers was casued by drought and dairy conversions. But in spite of fewer ewes and hoggets this season’s lamb crop is expected to increase 2.1% to 27.81 million.

Beef cattle numbers also dropped. There were 40.7 million of them at the end of June, 1.7% fewer than last year.

The fall in numbers while demand for lamb remains firm should give farmers reasonable prices this season.

But price rises based on falling supply aren’t nearly as good for the long term health of the meat industry as those based on increased demand.

Falling numbers will also focus attention on the problem of excess capacity at freezing works.

2 Responses to Fewer ewes but more lambs expected

  1. Ed Snack says:

    Interesting, for one thing, would NZ not get a “credit” on its Kyoto “obligations” arising from the reduction in stock numbers ? Or has the increase in Dairy more than made up for the change ?

    Right now, the lamb price is so high that I doubt that any processor is even breaking even. One problem with the chilled trade is that it is a year round trade, one must supply the market on a continuous basis with current stock. So if the lamb price is so high that you can’t even break even on gross margin, you have to chose between shorting your customers or dropping loads of money. With Frozen you could always supply from stock and cease killing for a period.

    Of course one obvious solution is to consolidate the industry, then instead of competition pushing up the lamb prices, industry “fiat” will decree a suitable price, right now it would be a good deal lower. But is that what farmers want ? In the end, the determinants of profitability in the trade depend on the overseas price (right now, surprisingly good), the exchange rate (right now, awful and worsening, just be thankful it ain’t at 0.82), and interest rates (good). Lamb pricing is just a way of distributing the money through the supply chain.

    All the major processors are getting quite good at their marketing, the chilled trade has developed remarkably well, but there’s still a lack of capital and investment. Competition is driving the marketing too, I can’t see a good case myself for consolidation.

  2. JC says:

    Haven’t bought more than a dozen roasts since they stopped supplying hogget some years ago.

    Thats the real calamity of the modern sheep meat market.

    JC

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