NEW ZEALAND, Timaru. Beef + Lamb New Zealand’s (B+LNZ) New Season Outlook 2019–20 report forecasts beef, lamb and mutton prices to lift from historically high levels, helped by continuing strong export demand and an expected weakening of the New Zealand dollar.
“We have forecast increases in farm-gate prices for beef, lamb and mutton in 2019-20, because small increases in in-market prices are expected to be further assisted by an easing of the New Zealand dollar,” says B+LNZ Chief Economist Andrew Burtt.
Beef and veal exports are expected to be up 5.9 percent to $4.17 billion and sheepmeat up by 4.9 percent to $4.23 billion. This would add another $430 million in export earnings for red meat and offal following an extra $228 million and $1.23 billion in the two seasons prior – excluding fibres and other products.
This follows the exceptionally strong farm-gate prices for lamb and mutton since the 2016-17 season. Beef prices have been steady since farm-gate prices jumped in 2014-15 but are expected to be up in 2019-20.
Burtt says the value of the New Zealand dollar has a large bearing on the sector’s outlook. The New Zealand dollar is expected to ease, partly due to the Reserve Bank of New Zealand lowering the official cash rate.
African Swine Fever (ASF) will have significant ramifications for global meat supplies and consumption. China is the world’s largest consumer of pork – making up around 63 percent of consumption. However, New Zealand’s growth in the export value of red meat and volume began before the Chinese ASF epidemic.
Strong Chinese import demand for mutton and value cuts from lamb continues since strong growth began midway in the 2016-17 season. The average farm gate lamb price is forecast to rise 3.5 percent in 2019-20 to 773 cents per kilogram and mutton is forecast to be up 4.5 percent to 473 cents per kilogram.
New Zealand and Australia dominate international trade in sheepmeat. Australia is expected to enter a period of flock rebuilding – weather permitting – driving significant declines in their production.