The organisation’s lamb crop report showed the preliminary spring lamb crop was estimated to drop 1.1 million head to 19.2 million — 5.2% fewer lambs were tailed due to a smaller breeding ewe flock and a decrease in ewe-lambing percentage.
Export lamb numbers were forecast to decrease 6.52% to 17 million head for the entire season, with first quarter processing numbers down 22.2% in the South Island.
Losses and poorer performance in the South Island was offset by a better result in the North Island. Significant drops in lamb numbers were seen in Marlborough-Canterbury (down 10%) and Otago (down 6.1%) due to drought. Wet weather in the South during lambing and snowstorms for parts of the South Island affected lamb survival.
That decrease in export lambs, and a 10.6% reduction in export adult sheep numbers, would likely reduce global supply, the report said.
Australian lamb production was also expected to be lower, further decreasing supply to global markets.
That tightening of supply had the potential to increase prices for New Zealand lamb in international markets. However, it might also reduce New Zealand’s market share in key markets, creating opportunities for competitors.
Those reduced volumes would reduce New Zealand’s overall export revenue from the red meat sector, challenging the country’s trade balance.
Processing companies would be closely monitoring livestock numbers and capacity in regions.
Overall lamb export processing was forecast to be down 11% in the three months to Christmas, but there were significant differences between the islands.
In the South Island, it was expected to be down 22%, but up 2.4% in the North Island.
In the southern South Island, high on-farm inflation over the past three seasons and structural changes, such as farm sales or exits, reflected ongoing financial strain. However, there was cautious optimism tied to anticipated better lamb prices and improving feed conditions.
In Otago, breeding ewes dropped 1.5% to 4.58 million, as dry summer and autumn conditions in the region saw farmers reduce ewe flocks. Forest planting, both whole-farm forestry conversion and planting trees within farms, contributed to permanently reduced ewe numbers. Numbers in Southland were steady, up 0.7%.
Rabobank’s latest Agribusiness Monthly report said farmgate lamb prices were holding up stronger than expected as the first few weeks in the 2024-25 export season passed by.
Early December AgriHQ pricing had been hovering around $8kg cwt to $8.10kg cwt nationally for lamb. The average export value for lamb over October remained more than 50c kg cwt greater than October 2023, in signals that bode for optimism.
It might be a bit early to tell if there were signs of improvement in sheepmeat volumes to China.
However, the improved proportionate volumes in frozen lamb sent into China, versus other markets, for the month of October — indicative of Chinese New Year demand — might be a good omen for the sheepmeat demand from China in general into 2025, senior animal protein analyst Jen Corkran said.
