Lamb cheaper here and there

Butterfly legs of lamb have been selling at an Oamaru New World supermarket for $19 a kilo.

I appreciate that as a consumer but as a producer realise that is reflecting lower prices for our stock.

The red ink in meat companies’ annual reports showed that last years prices were higher than they should have been and we’re paying for it now.

We’re not in this by ourselves, the National Sheep Association in Britain is calling for supermarkets there to favour local lamb ahead of ours:

The National Sheep Association has claimed supermarkets are not stocking UK lamb as it is ‘out of season’ and instead opting for New Zealand meat.

The association said it was a ‘bitter blow’ for sheep farmers at a time when many are not receiving financial returns to cover the cost of production.

Farmers are losing £29 on average for every lamb they sell at market after new figures revealed farm gate prices have dropped by a fifth in the past year.

Lamb prices are at their lowest in three years due to a poor summer, rising production costs and a longer finishing period.

“Given that New Zealand lamb on supermarket shelves is not as cheap as it has been historically, a better pricing structure in supermarkets, a wider selection of UK cuts and better presentation on the shelf would all benefit shoppers and farmers alike” the NSA said.

But Sainsbury’s pledged to increase the amount it pays for lamb until the end of February at more than 60p/kg above the market rate.

The news came after several farming groups called on retailers to show a ‘genuine commitment’ to their British suppliers and customers.

More than 800 farmers who supply Sainsbury’s own brands will receive £3.80/kg for lamb, in a move that will ease the burden on some already hard-pressed farmers struggling with the collapse in the price of lamb.

“Sainsbury’s has recognised that sheep farmers cannot run businesses on current prices. It’s clearly time for the whole trade to now show they are committed to a sustainable UK lamb industry” said NFU livestock board chairman Charles Sercombe. . .

The recession has had an impact on demand and therefore prices for better cuts, notably lamb racks.

But the problem of low returns isn’t just due to meat prices, it’s also caused by low demand for wool and other by products.

3 Responses to Lamb cheaper here and there

  1. Roger says:

    I’d be interested to know the difference between the “retail” price at the supermarket of $19 per kg and the price received by the farmer at the farmgate. Anyone know?



  2. Mr E says:

    $4.80 as a rough figure currently.


  3. Mr E says:

    Some rough math…
    UK farmers get 3.80/kg from Sainsbury. That is $7.35/kg in NZ dollars.
    The difference being $2.55 NZ/kgCW between what the two farmers get paid. Over an average 18kgCW NZ lamb = $46 per lamb they currently get more than us. Sure some of that goes into transport but only a small amount.

    They are losing 29 pound. To get lamb sustainable in the UK the market needs to pay an additional $56 NZ.
    Imagine if NZ farmers got parity. Imagine if UK farmers got the extra money they need for sustainablity and that flowed on to NZ farmers. We are talking an extra $100 per lamb.
    Considering NZ lamb has a reported lower carbon foot print why buy UK?
    Current prices are too low for NZ farmers too. The NZ lamb industry is not sustainable. I am pleased to hear UK farmers wanting more but not more than NZ farmers.


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