New Zealand lamb exports limited but not by production or demand

By Rebecca Wright

New Zealand exports of sheep meat in the year-to August grew 1% on the previous year, to 288,700 tonnes. Looking at the months it is very much a tale of multiple chapters.

Exports in January were lower than year earlier levels reflecting the lower production recorded in the preceding few months.

• In February there was a marked pick-up in volumes mostly due to the exceptionally low volumes exported to China in February 2020.
• Volumes in April were up a little but down on pre-Covid volumes.
• Through July and August volumes were slightly down on 2020, but this was a result of volumes playing catch up in July and August 2020 following the disruption during the early months of the pandemic.

Exports to the EU and UK have not followed the same trend as to the rest of the world. There have been fewer and smaller periods of growth. Strong prices in Asia have been attracting product away from Europe in recent years with freight prices helping to make the Asian market more attractive.

Looking forwards, the New Zealand lamb crop for the coming year is forecast to be up slightly although recent snow in certain regions may limit this increase. How much impact the late snowfall has on the lamb crop will not be clear for some time.

A watch point is that New Zealand frozen stores are being reported as being on the full side. In the short term this is unlikely to have much impact on export prices or volumes as the limiting factor to New Zealand lamb exports is currently shipping container availability. It has been said that at certain times shipping container availability has been at a third of its normal level. Industry reports suggest the additional costs currently facing the New Zealand supply chain are equivalent to New Zealand farmgate prices being circa 45NZ¢/kg higher than they currently are.  

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