Information on pricing of lamb contracts is still thin on the ground, even Agridata is having issues, writes Graham Butcher in the Southland Times.The Mega Silver Fern Farm contract is of particular interest because it is the one most likely to fit, given some farm management tweaks. This is where you supply lambs for six months of the year with 80% during December to April. Given an "average" farm, this means about 600 lambs taken through to May and June. In return you get a full year of guaranteed prices, which rise going into the winter months. The big question is, though, whether it is better to fix your prices for the year or take an opportunity to look at weekly spot prices and take the best on offer. You also need to think about your own financial position with the bank. By not fixing prices you are taking on board risk. There is no blanket answer to "contract or not" so I'm not going to give one. I will say, however, that a contract system targeting supply to suit customers and formulated for the whole of NZ is sound and sensible. Full credit to SFF for presenting its opportunity to farmers but, with other companies yapping at its heels trying to steal lambs, I wonder about this contract's future.
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