As New Zealand’s summer begins for the third consecutive year with mixed weather conditions, the sheep and beef sectors face a complex landscape. Grass growth rates are strong, yet dry conditions are emerging in various regions. While reduced feed pressures are positive, completing on-farm tasks has been challenging.
The flow of new season lambs and finished cattle in the North Island is lagging, with lamb growth rates remaining modest and cattle still shedding their winter coats. In contrast, the South Island has seen a pickup in lamb supplies into December, though early drafts were slightly underwhelming. Cattle farmers face a decision: sell now or use the available feed to increase livestock weight.
Farmers with ample feed are opting to add live weight to their stock, a strategy that must be balanced against the risk of carrying extra stock into the new year, especially with the possibility of drought. Staffing rates at processing plants have improved compared to the last two summers, reducing the likelihood of backlogs, but the risk remains for the January to March period.
Market conditions for New Zealand lamb exports have remained stable, with volumes at good levels, reflecting lower pricing rather than increased demand. There are signs of improvement in the Chinese market, but caution prevails. The next three months are expected to see large volumes of lamb and mutton produced and exported from New Zealand.
In the beef sector, seasonal pricing pressure is beginning to emerge as slaughter numbers increase. However, the US market is being closely watched, with the potential to significantly boost returns in 2024 once US herd liquidation ends.
As the new year approaches, the need for market improvement in the sheep and beef sector is critical. The current global oversupply, particularly of lamb, is unlikely to change in the short term. The focus needs to shift from external factors, such as Australia’s influence on prices, to internal strategies that position New Zealand to capitalise when market conditions improve. Emphasising the value of quality over quantity to markets could also be beneficial.
This analysis by AgriHQ analyst Mel Croad provides key insights into the dynamics of New Zealand’s sheep and beef markets, highlighting the need for strategic planning and market adaptation.
