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Could New Zealand exports of lamb to the UK be low again?
Thursday, 6 February 2020
By Rebecca Wright
With Easter approaching many people have asked, how much New Zealand lamb could be on the shelves this Easter?
What is product availability in New Zealand?
It is well documented that supply compared to demand is tight in New Zealand. Beef and Lamb New Zealand forecasts that total export volumes of sheep meat will be steady year-on-year in the current production cycle but that prices will again rise. With demand in China rising, I was already expecting a higher proportion to be sent there this year and that prices would be supported in New Zealand.
Global supply has tightened again in the past month
Recent developments on the global sheep meat market have added to the situation, in particular the wildfires in Australia. Around a quarter of Australia’s sheep live in areas impacted by fires, although that is not say all these sheep have been lost. It will take many months for that figure to become clear. Abattoirs and ports are still operational in Australia, although some roads have been damaged. So while the ability to kill is there, there will be some impact on production volumes. So why is this relevant to the UK? Australia does not send large volumes to us having limited access but New Zealand does, and has many common markets with Australia. If China, and other Asian markets, can’t source sufficient product from Australia then they are most likely to look to increase shipments from New Zealand. It is from this end of the chain when the UK may feel some impact.
A reduction in New Zealand lamb coming to the UK
New Zealand lamb legs coming in at Easter are an important part of the UK lamb supply. I can say without a doubt that some product from New Zealand will still be imported. Many contracts for Easter supply are signed six months in advance which will have secured some volume, although we do not know how much. Where New Zealand has flexibility now is with the product which would be sold on the spot market. Price is likely to be the main driver here. Any New Zealand lamb aimed at the European Easter market needs to be on the water by the end of February to allow for shipping times. New Zealand farmgate prices are continuing at a high level, continued strong demand and prices in China and global supply tightening again all point towards one conclusion – a reduction in New Zealand lamb coming to the UK.
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