Demand for lamb in the United Kingdom after Easter looms as an important measure of prices for the rest of the season.
So far demand for lamb in the lead-up to Easter has been buoyant, but Alliance Group chief executive Grant Cuff said recently the fundamentals of a lack of lamb internationally remained and were likely to continue to underpin the market and prices.
Sheep farmers were averaging about $90 a lamb this season, almost double the $54 they were paid last season, because of a more favourable exchange rate and low international supplies.
Mr Cuff said he would be looking for demand to hold up after Easter as a sign prices and markets would be maintained through winter.
That would be helped by the New Zealand kill falling away quite quickly this season because of a 23% decline in New Zealand lamb numbers.
Pelt prices were lower than last year but, importantly, they were still being sold, Mr Cuff said.
Silver Fern Farms has also reported a positive market for lamb.
In its latest market update, the Dunedin meat company said the quick decline in the lamb kill in recent weeks had firmed up demand as customers secured supply for the coming months.
The shorter than usual killing season could create a continuity-of-supply problem for customers, the company warned.
"As we head towards winter programmes, the premium chilled markets will remain the production focus, which will further tighten lamb supply to the frozen market, and this is likely to lead to improved prices in the medium term."
International beef prices remained volatile, driven by consumers trading down to lower quality cuts and fast food, competition for markets and other markets collapsing.
SFF beef marketing manager Lyn Jaffray told farmers at a field day this week the United States had 70% of the Korean beef market until imports were banned following an outbreak of bovine spongiform encephalopathy (BSE), but now trade had resumed, it wanted that market share back.
Demand from Korea was also weak because of an unfavourable exchange rate along with consumers trading down to chicken and pork.
Another factor causing international volatility was the Russian market.
Mr Jaffray said, fuelled by income from record energy prices, Russian demand for beef had soared and Australia was quick to supply it.
But Russia had since been hit hard by the credit crunch and that market had dried up, Mr Jaffray said.
SFF's market update said many beef importers had financial balance dates of the end of March and were running down inventory ahead of that, but orders were expected to pick up in April and May.
The tenuous position of many in the meat industry has been highlighted in recent weeks.
SFF said six Brazilian beef processing companies had collapsed in recent weeks and Meat and Wool New Zealand's market services manager, Craig Finch, told the organisation's recent annual meeting that many US feedlots were closing as they were squeezed by feed costs and people eating lower value cuts.
This could have longer-term benefits for New Zealand meat exporters once the recession ended as supply was unlikely to keep pace with demand.
