As farmers look for more long term certainty for their meat and wool products this years shortages of product brought about by the September storms, may ensure these prices carry on for a while yet.
Unprecedented demand for sheep meats, principally mutton due to shortages out of Australia, have seen NZ farmers cashing in at the expense of medium term recovery of stock numbers.
Sheep meat values have been helped substantially by a recovery in the co products markets, including wool, which had dropped to only 7% of the carcase returns.
With this now being the case do farmers want to see more transparency in their schedule information, so they can see where the value is coming from? Why have wool and pelt values disappeared from killing sheets? Tell us what you thnk.
The rebuilding of storm-decimated ewe flocks could be hampered by competing record mutton prices which are returning $100-plus a ewe to farmers - similar prices to prime lambs. Cash-strapped farmers say that cull ewes capable of one more lambing are returning more for meat value than for breeding and are being sold to meat processors reports The ODT. Farmers attending a Perendale Sheep Society of New Zealand field day in West Otago last week described mutton prices as the hidden success story of the season, but several admitted it would mean a delay in rebuilding flocks and could see quality genetics trucked off to processing plants.
Alliance Group livestock manager Murray Behrent said high mutton prices were a symptom of a world shortage of sheep meat and growing demand for protein, especially out of China. He told about 60 people at the field day that flaps, which were selling for $700 to $800 a tonne, were now fetching $3000-plus a tonne in China. Beef and Lamb NZ Economic Service director Rob Davison said for the month of December, the average export price of mutton meat exports was 26% higher than at the same period a year earlier. Skin and wool prices were also higher. Australian production would dictate future mutton supplies and prices.
Mr Behrent said unsatisfied demand for sheep meat allowed companies to direct product to the highest paying markets and those where companies were not being harmed by wild exchange-rate fluctuations. Co-products were also strong. He said 17 years ago co-products contributed 23% of carcass returns to farmers. This fell in recent years to 7% but has since recovered to 14%. He expected values to reach 18% of lamb value by the end of the season.
Other commentators are saying the high pricing will make farmers less accepting of change, as they start debating a new business strategy for the red-meat sector. While farmers were relishing lamb prices $20 a head higher than last year, many will still make less money than last year because they have less product to sell.