New Zealand-Beef and Lamb trade.

NEW ZEALAND-THE BEEF AND LAMB TRADE.

Product shortage is currently the main issue for exporters of New Zealand lamb. Despite the increases in the lamb kill over recent weeks, exporters are struggling to fill orders from long-term customers, let alone take on new orders. This situation is expected to get continually worse as the season progresses and the much talked about ’black hole’ in the lamb supply emerges quickly.

Killing space will be tight throughout April with two short weeks in the month reducing processing capacity, which in theory could prompt a reduction in schedule prices. But due to the competitive market situation, schedule price movements this week range from steady to plus 20c/kg in the North Island, and steady to up 10c/kg in the South.

BEEF

The US imported beef market saw strong activity at the start of last week as buyers were actively trying to fill gaps in orders sheets. However, by Thursday this activity appeared to have settled somewhat, with a number of participants pulling out of the spot market as orders were filled and news of another round of subsidised dairy cow culls in the US were released. This latest round is expected to see 200,000 to 240,000 cows culled. If this occurs over the next two months while the New Zealand cow kill is in full swing, this could soften prices further.

The market for prime cuts continues to struggle and this is best shown in the current differential between steers and bulls. The schedule price premium for steers over bulls started the season at around 31c/kg, which is 10c/kg higher than the five year average, but is now currently averaging 11c/kg. This is in stark contrast to last season, where the differential for the same week was 23c/kg and the five year average for this time of year is 17c/kg.

Schedule movements this week ranged from steady to down 15c/kg in both Islands.