NZ chilled lamb exports to Europe up

Irish farmers have driven down the price of lamb in some key European markets, such as France, by 17 per cent, and New Zealand farmers suspect it may be part of a liquidation of Irish and British flocks.

Changes in Europe's Common Agricultural Policy (CAP) which mean farmers are no longer paid to produce food but to be custodians of land, have put economic pressure on farmers in both countries.

CAP reform has forced many farmers to scale down their flocks and become more efficient. Britain's Meat and Livestock commission has said one third of British farmers and smallholders don't make a profit.

Over the past year, New Zealand has boosted its sendings of chilled lamb to Europe to 42,000 tonnes, up 2000 tonnes on the previous year.

But Meat and Wool New Zealand chairman Jeff Grant said that Irish farmers recently sent fresh lamb into France at prices only 20 pence a pound ($1.14/kg) above the price of frozen New Zealand lamb.

"They were shifting good product -- fresh -- into France at only 20p a pound more expensive than New Zealand frozen," he said.

"It's a reflection of liquidation -- the Irish are probably the most pessimistic about sheepmeat's future.

"The decline in production over the next couple of years in the European domestic market may be reflected in increased production in New Zealand," he said.

The unknown quantity for New Zealand was what would happen in Europe's arable sector a couple of years from now -- the proportion of land used for cropping could affect both the amount of land available for meat production and the amount of grain or other feed available for intensively-farmed animals.

In the meantime, Mr Grant said the proportion of sheepmeat exports to Europe which were sent chilled rather than frozen was no longer a hair-trigger issue with European farmers.

New Zealand has an EU quota of 227,854 tonnes of sheepmeat -- worth about $1.4 billion annually, and equivalent to more than 70 per cent of EU sheepmeat imports -- and in theory, could fill it all with the highest value product, chilled lamb.

New Zealand earned a record $2.71 billion from sheepmeat and co-products in the year to September 30, 2005, including a record $1.55 billion from 181,882 tonnes of sheepmeat exports to the EU -- 64 per cent of the nation's sheepmeat exports by value and 50 per cent by weight.

A total of 83 per cent of the sheepmeat sent to the EU went to the UK (79,626 tonnes), Germany (30,054 tonnes), France (26,679 tonnes) and Belgium (12,822 tonnes).

Sheepmeat exports to North America earned a record $382 million, compared with $371 million the previous year, even though the tonnages shipped were down 9.9 per cent, at 47,263 tonnes, compared with 52,431 tonnes in 2004.

Lamb exports to the United States slumped from 25,034 tonnes in 2004 to 19,844 tonnes last year, even though earnings rose 1.6 per cent.

- NZPA