New Zealand update: lamb crop on the up compared to last year

Key points:

• New Zealand lamb crop predicted growth of up to 20.4m head for 2023–24
• Boosted lamb slaughter levels, expected to be up by 2.5% for 2023–24; this is below previous years
• Exports may grow to China and Europe to fill demand from the holiday season, but limited by lower priced Australian product
• The GB SQQ remains elevated from last year, at 570p/kg for the week ending 4 November

The new season lamb crop in New Zealand is predicted to be up to 20.4m head according to the latest report by Beef and Lamb New Zealand (B&LNZ). This is growth of 0.6% compared to the same time last year, as better breeding conditions and increased scanning rates have boosted production. There has, however, been a slight fall in the number of breeding ewes compared to last year, with numbers forecast to fall again as farmers are expected to retain fewer for breeding.

Due to these factors, lamb slaughter levels are expected to be up 2.5% to 17.6m head compared to last year, but this remains lower historically.

B&LNZ expect levels of demand globally to increase for New Zealand lamb, as Christmas approaches in the EU and UK, Chinese New Year in February 2024, and as China clears its inventories. Similarly, a projected weaker NZD to EUR/GBP will boost price competitiveness to these markets. B&LNZ are predicting a slight rise of 0.7% in prices, which AgriHQ note is the lowest beginning price of a season since 2017.

Another factor influencing New Zealand lamb prices and exports moving forward is the growth of Australian production. According to AgriHQ, New Zealand’s exports are limited by Australian product being sent to countries at an incredibly competitive price. The price of Australian lamb on the international market could fall further, as Australia’s production grows and previously delisted processing plants are coming back online, increasing supply available for export. Given this growth in export capacity, China’s ability to absorb volumes from Australia is one to watch. Any faltering in demand from China could lead to more Oceania lamb looking for a home on the global market, which could put pressure on prices (AgriHQ).

What does this mean for the UK?

So far this year – from January to August – the UK has imported just under 20,000 tonnes of sheep meat from New Zealand, which is a fall of 7,500 tonnes (28%) from the same time last year. New Zealand has shifted its export volumes into Asia, as well as growing volumes into the EU. We will likely see a seasonal uplift in sheep meat imports in the coming months, as Christmas and Easter approach, and New Zealand supply can fill in any potential gaps for UK demand. The price and scale of these imports will be a key determinant for domestic prices.

The GB SQQ deadweight lamb price has stayed elevated on last year, as estimated kill remains lower. The deadweight SQQ was just under 570p/kg for the week ending 4 November, up by 57p from the same time last year.

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