Lamb numbers rise in leaps and bounds

Favourable weather has been cited as a major factor in the additional 1.7 million lambs tailed compared with last season. Photo / Greg Bowker

Better weather this year has seen lamb numbers jump by 1.7 million and good prices will help the sector add $100 million more to the local economy than it did last season.

Beef and Lamb New Zealand's annual survey shows the number of lambs tailed this spring was up 1.7 million on last season at 26.5 million.

But numbers were poor last year - a result of adverse weather hitting much of the country during the peak of lambing.

"Compared with last spring, this year's weather at peak lambing was vastly improved," Beef and Lamb's Rob Davison said. "However, offsetting the increased numbers of lambs born per 100 ewes was a 2.5 per cent decrease in the size of the country's breeding ewe flock.

"This reflects the continuing expansion of the dairy herd and last season's strong mutton prices, which encouraged a higher than usual cull of poorer-performing ewes."

Early season payments to farmers for prime export lamb were strong at about $8-$8.20 a kilogram, though indications were that prices would ease back as the season progressed, he said.

Price levels had injected some confidence back into the industry, Davison said. "You just have to go back to 2007/08 and the sheep and beef farm, the average farm profit then was about $10,000 per farm.

"That sort of situation caused a whole lot of change and underwrote people moving towards dairy production instead of sheep and beef on some of the best land."

According to Beef and Lamb's new season outlook in September, sheep and beef farm profit before tax for 2010/11 was an average $114,200 per farm. The number of prime lambs available for export this season was estimated to be 20.6 million, which was 1.3 million more than last season.

The lamb crop was expected to generate $2.9 billion in export receipts - $100 million more than in 2010/11.

ANZ rural economist Con Williams said supply would bounce out of Australia and New Zealand, and the retail price of lamb had moved unsustainably higher than beef, pork and poultry.

"Then ... we think Europe's going to probably head into recession in the first quarter of next year so we think that'll lead to a correction in lamb prices," Williams said.

"I think prices are going to ease but I think production's probably going to be a bit better ... so that'll help on the other side of the revenue line."

Meanwhile, shoppers might see some cheaper lamb prices.

"I think that'd be a reasonable assumption," Williams said.

Talk was of prices easing in Europe "so I think that will also be reflected a little bit in New Zealand".

LAMB CROP
* 26.5m lambs tailed this spring, up 1.7m on last year.
* $2.9b expected in export receipts, up $100m on last year.
* Weather at peak lambing was better than last spring.