NZ's Shrinking Flock Could be a Bonus for UK Rivals

September 12, 2008 - New Zealand has traditionally been one of the lead players on the international lamb market sending over 100,000 tons each year to the Europe Union (EU) under a longstanding quota agreement. However, it now seems probable, according to figures from Meat and Wool New Zealand (MWNZ), that farmers and abattoirs will be unable to fill their quota entitlement. The basic fact is that lamb production in New Zealand is proving to be increasingly less profitable while the growing demand for dairy products has persuaded many sheep farmers to swap their ewes for cows. The figures reveal that the New Zealand ewe flock is at it lowest level since 1950.

The EU has always been viewed as the premium market for New Zealand lamb, but alternative outlets have been opening up in recent years, particularly in the Far East. Another problem for the trade on the other side of the world is the continuing depreciation of the New Zealand dollar against the euro. This trend is forecast to continue.

MWNZ reckons that the price of lamb landed in the EU will have to increase by at least 14 percent to maintain margins both for farmers and producers. This promises to be good news for the United Kingdom sheep farmers, who have the largest collective flock in the EU. Prices are currently holding up well at a time when the trade has in the past invariably taken a seasonal dip.
Reprinted in part from The Scotsman

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