THE New Zealand lamb market is currently under pressure as a result of increased slaughtering, creating the potential for an influx of cheap imports to Europe in the short term.
That cautionary warning was made by Stuart Ashworth, QMS head of economic services, in his latest analysis. "After a slow start, drought conditions in several parts of New Zealand have seen a major rush of lambs into plants," observed Mr Ashworth.
"New Zealand slaughter statistics show a 35 per cent increase in January slaughter numbers and an 11.5 per cent increase since the start of the season. Setting these numbers in the context of Beef and Lamb New Zealand's early forecasts of the lamb crop being unchanged, then New Zealand supplies must be expected to tighten as the year progresses," he added.
However, Mr Ashworth reports that in the short term, New Zealand is finding it hard to grow export volumes to China and a dock strike on the United States west coast, now ended, slowed down trade there.
The consequence of this is that New Zealand lamb prices have come under pressure, falling around ten per cent since the turn of the year in national currency and sitting around eight to nine per cent lower than a year ago.
"As a result there is some potential for increased deliveries to Europe in the short term rather than stock building in cold stores in New Zealand," Mr Ashworth warns.
An influx of New Zealand imports could weaken European prices that are currently higher by more than five per cent on the year in most major producing countries as a result of tighter supplies.
Despite the strength of sterling hampering exports, Scottish producer prices for hoggs are also being supported by a tightening of supplies in the UK market as well as the rest of the EU.
Meanwhile, the slaughtering of mature sheep continues to be well below year-earlier levels. June to January cull ewe and ram slaughtering is reported to be almost 16 per cent (225,000 head) lower than last year, and in January alone the kill was nearly 24 per cent lower, said Mr Ashworth.
"A decline of this scale is likely to be helping prices of heavy hoggs, but also suggests an increase in breeding sheep numbers for the 2015 lamb crop," he added.
Market round-up
Messrs Craig Wilson Ltd sold 327 store heifers at Ayr on Thursday to a top of £1300 per head and 260.3p per kg to average £879.95 and 224.8p, while 286 store, beef-bred bullocks peaked at £1285 and 300p to level at £959.63 and 238.9p. Forty-nine store, B&W bullocks sold to £900 and 192p to average £741.94 and 168.6p.
The Cumberland and Dumfriesshire Farmers Mart had a massive show of 6178 prime hoggs in Longtown on Thursday that sold to a top of £127 per head and 285p per kg to average 200.6p (+7.6p on the week).
The firm also had 4272 cast sheep forward when heavy ewes sold to £167 for Texels and averaged £105.25 (-£3.49), while light ewes peaked at £111 for Blackfaces and levelled at £65.71 (+£1.62). Rams sold to £164 for a Texel and averaged £106.54 (+£10.49).
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