Sheep and beef export earnings up

10 August 2011

Sheep and beef export earnings up - sheep numbers down but consolidating

Export earnings for New Zealand sheep and beef products totalled $5.8 billion last year - an increase of 9 per cent, according to Beef + Lamb New Zealand's (B+LNZ) Economic Service annual Stock Number Survey. The survey shows sheep numbers down 2.1 per cent to 31.9 million while the beef herd stayed almost static at 3.9 million (-0.2%) in the year to 30 June 2011, B+LNZ Economic Service Executive Director, Rob Davison said.

"The decrease in sheep numbers flows on from the tough spring of 2010 and that resulted in a low supply of lambs this year. This in turn has cut back the supply of lambs that can be held over as future breeding flock replacements."

Davison said tight global supplies of lamb and sheepmeat saw world market prices lift significantly.

"These high prices allowed a higher than usual cull of poorer producing sheep with the objective to improve the flock quality for future breeding seasons and this also contributed to the sheep flock decrease. World market lamb prices were also up significantly on the previous year but the lamb supply from New Zealand remained constrained from the previous spring's poor lamb crop."

In the year ended 30 June 2011, lamb generated $2.7 billion which is 3.4 per cent ahead of last year but from reduced export volumes (-15%). Lamb meat at $9,300 per tonne was up 17 per cent and co-products receipts, like lamb skins and offal, were also up 17 per cent on the previous year.

"The decline in the ewe flock has ensured mutton exports receipts were the standout story - up 35 per cent to $580 million with the volume shipped up 15 per cent. The price per tonne of mutton shipped was $6,425 (+19%) and co-product receipts were up 31 per cent." Davison said beef export receipts at $2.5 billion were up 14 per cent despite the volume shipped decreasing 3 per cent. The price per tonne of beef shipped at $5,825 per tonne was up 16 per cent and receipts from beef co-products were up 22 per cent.

Within the $5.8 billion sheep and beef export receipts, meat exports made up $5.0 billion (86%) and co-products 800 million (14%). "Strong prices and favourable conditions particularly from autumn have boosted confidence on sheep and beef farms. Improved prices this year have provided cash to address legacy issues from successive years of droughts and increased debt levels. Reducing debt and catching up on deferred maintenance and fertiliser inputs will certainly be ongoing priorities for the coming year. "

Davison says early expectations are for this spring's total lamb crop to be up 1.4 million on last year's poor result to 26.2 million lambs.

"But even then, this will be second smallest lamb crop in 50 years. Only last year's was lower. More lambs are expected born per 100 ewes than last year and will more than offset the 2.5 per cent decrease in breeding numbers this year.

"With this year's lamb crop up, the yield of lambs for export is estimated at 20.1 million, up 5.8 per cent on last year but the second lowest production in 40 years. Only the year just ending was lower.

"With sheep numbers expected to have bottomed out, a higher retention of lambs for flock replacements is needed for next year to start a small recovery in sheep numbers."

The annual B+LNZ Economic Service Stock Number Survey records the key livestock numbers that form the productive base for the farming year ending 30 June 2012. The full report can be downloaded from the Beef + Lamb New Zealand website http://www.beeflambnz.com/data/dl/stock_survey.pdf

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