The high NZ dollar has sheep farmers bracing for a mid- season slump in prices, perhaps as low as $70 a lamb. Earlier this month, lamb prices had risen to $6.10 a kilogram as winter contracts ended and they are expected to drop from now as lamb supplies traditionally increase reports Stuff. But the high dollar against the United States currency is hindering good demand from Europe and farmers fear their returns will be much less when most lambs enter the market in January if it remains at its current position. Federated Farmers Meat & Fibre vice-chairman Jeanette Maxwell said farmers would be getting far better returns for lamb and beef if the dollar was lower against the United States currency. "The dollar is a problem, it really is, and I do not think people understand that an increase of a few cents wipes dollars off lamb and beef returns. We can expect from now on they will descend if we are still 72 cents to the US dollar and I would think we will be scratching to get $70 [a lamb] mid season." Canterbury flocks are "substantially' understocked, as farmers prefer to run fewer ewes and finish lambs to make better money. North Canterbury farmers used to run big ewe numbers and sell lambs early to the store market for other farmers to finish, but during the past 18 months flocks have trended lower after farmers were caught out by drought and without enough feed for stock. As a result, lamb prices are high in the store market and this will be felt in the prime lamb trade. Maxwell said this would be disappointing for mid-season suppliers, as the meat companies would have paid better money earlier on and would try to recoup the money through lower prices when supplies increased. The reality of the meat industry was that companies had to carry the cost of running staff and plants year round, she said. Farmers were anticipating the rough weather forecast this week and had taken the precaution of mitigating it by finding good shelter for pregnant ewes. The bad weather was in contrast to one of the better starts to spring in the foothills and ewe condition was in good order after a cold autumn because of good spring grass growth. Below, the foothills farmers have enjoyed good lambing from July and early farmers will sell stock soon.
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