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Long term contracts buoy farmers

Long term contracts buoy farmers

Wairarapa sheep farmers are already selling next year's lambs at set prices giving economic certainty even as forecasts for the dairy payout 2009 continue to fall.  Fed Farmers Wairarapa chairman Anders Crofoot said lambs have historically been sold at set prices on the spot market a week or a couple of months in advance reports The Wairarapa Times. Now lamb companies including Silver Fern Farms and Wrightson are approaching farmers and "trying to get contracts going up to 12 months". Mr Crofoot said there was room in the contracts if farmers found themselves unable to supply. Lamb prices are still above $5 a kilogram after peaking about $5.50, but beef has suffered a recent drop in price. The move towards long-term contracts is sparked in part by a shortage of lamb. European supermarkets have historically been reluctant to agree to long-term contracts, but Mr Crofoot believes "everybody is realising there's going to be a huge shortfall of product".

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