Lamb drop 2m down because of drought

September 6, 2013

The impact of last season’s drought in the North Island has taken a siginifcant toll on stock numbers.

Last season’s North Island drought has dented New Zealand’s sheep and cattle numbers and this spring’s lamb crop is expected to be 2 million lambs less – down 7.7 per cent to 24.43 million head.

The Beef + Lamb New Zealand (B+LNZ) Economic Service annual stock number survey confirms what many predicted, following the recent prolonged and extensive drought. The survey provides the country’s sheep and beef sector with a prediction of the productive base of livestock for the 2013-14 season.

While both sheep and cattle numbers fell – 1 per cent and 1.3 per cent respectively – it is the lamb crop that reflects the drought’s impact most significantly.

The export lamb slaughter for 2013-14 is expected to be 18.6 million head, a decrease of 8.5 per cent and the export cattle slaughter is forecast to decrease 2.7 per cent to 2.2 million head in 2013-14.

This will have a big impact on the meat industry and also on other businesses which service and supply farms including shearers and stock firms.

B+LNZ Economic Service Chief Economist, Andrew Burtt says the drought conditions affected ewe condition at mating and, consequently, scanning results were variable across the North Island.

“We’re expecting lambing percentages to be down by up to 20 percentage points in the regions worst hit by drought in the north. The South Island fared better and scanning results were down only a few percentage points – and that’s against last season, which was favourable in the south.”

Overall, sheep numbers were down 1 per cent to 30.94 million head at 30 June 2013, compared to 31.26 million a year earlier.

Mr Burtt says breeding ewe numbers were also down 1 per cent overall, but the numbers in each island moved in opposite directions. “Ewe numbers in the North Island decreased by 2.7 per cent to 9.52 million, while South Island ewe numbers were almost static (+0.5%) at 10.69 million.

“Hogget numbers reflected a similar pattern – back 1.3 per cent overall, but down 3.5 per cent in the north and up 1 per cent in the south.”

Meanwhile, cattle numbers fell 1.3 per cent to 3.69 million head at 30 June 2013, from 3.73 million in 2012. “Again, the North Island figures tell the drought story, with numbers back 2.5 per cent – with particularly large decreases in East Coast and Taranaki-Manawatu – while the South Island’s cattle numbers rose 1.8 per cent.”

The full report is at Beef + Lamb’s website.


Upside to high $

June 1, 2011

The New Zealand dollar hit a post-float high of  82.62 US cents yesterday.

That makes exports traded in US currency more expensive but it also makes imports cheaper and the NZIER says it will help keep inflation down.

Inflationary pressures are building because businesses have seen their margins slimmed down and will want to recoup some ground when the economy picks up pace – likely to begin in 2012 as the rebuild of Christchurch gains pace, according to the institute Quarterly Predictions report.

“The RBNZ will need to raise rates next year towards 4% to offset these inflationary pressures,” NZIER principal economist Shamubeel Eaqub said in a statement. “A high NZD is helping to keep a lid on inflation for now. We expect the NZD to remain elevated for some time,” he said.

 Beef + Lamb New Zealand’s (B+LNZ) Economic Service’s report on movements in sheep and beef input prices showed a 4.1% increase in the year to the end of March this year, in contrast to a 2.9% decrease the previous year.

The increase has been driven by the price of fertiliser, fuel and increases in banking interest rates, says B+LNZ Economic Service Executive Director, Rob Davison.

 “The price rises for fertiliser and interest have a big impact given they are the largest areas of expenditure on sheep and beef farms.

If the higher dollar helps keep the price of fertiliser down and keeps a rein on inflation which in turn reduces the need for interest rate rises it will compensate for the currency’s impact on export prices.

Normally when the dollar is high farmers complain. There’s hardly been a whimper this time, and nor should there be. Commodity prices are still holding up and the higher dollar takes the pressure off the price of inputs like fuel, fertiliser and machinery.

The Fieldays open in a couple of weeks. They’re a barometer for farming confidence and exhibitors will be expecting to make good sales.


Lamb prices bouyant, crop down

May 10, 2011

The Southland blizzard, spring storms in the North Island and dairy conversions have taken their toll on this season’s lamb crop.

Beef + Lamb New Zealand’s (B+LNZ) Economic Service announced today after reviewing the provisional half-year lamb slaughter numbers that total lamb production is on track to reach the forecast figure of 19.3 million head for the current season. This season is 7.7 per cent less than the 2009-10 season and is less than the 19.5 million head forecast in the November 2010 Lamb Crop report. This is the lowest lamb slaughter figure since the 1960-61 season.

Supply is down and prices are up and look bouyant for the rest of the season.

Lower global supply, including lower than usual exports from Australia, have led to higher mutton prices with record highs throughout the season even though our export mutton volumes are higher.

 Based on the provisional half-year slaughter numbers, we still expect at least 4 million head of mutton to be processed, which is 9.9 per cent more than last season.” Anecdotal comment suggests farmers are culling the bottom end of their flocks to take advantage of higher mutton prices and this could lift the mutton volume a further 5 per cent (0.2 million). In turn this may have an offset with more lambs kept as replacements lowering the export lamb slaughter by a similar number. Lamb prices for April averaged $116 per head and were up 53 per cent on last year’s $76 per head for the same month. Similarly mutton prices are up 63 per cent on 12 months ago and for April averaged $97 per head.

The last three seasons have been very tough for sheep farmers. This season’s improved returns for lamb and mutton and  are very welcome, especially when pelts and wool are also receiving better prices.


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