Up to 500,000 lambs are thought to have died in the freezing conditions. Photo / Otago Daily Times
The cost of lamb is likely to go up following Southland's savage snowstorm - but so far a strong NZ dollar and weak British pound have actually pushed prices down.
Farmers are thought to have lost between 350,000 and 500,000 lambs in last month's heavy snow and freezing temperatures in
the Deep South.
The big drop in lamb numbers is expected to push prices up soon but at this stage exchange rates have kept supermarket prices in check.
BNZ economist Doug Steel said in the short term vegetable prices were more likely to go up than meat.
"It's likely there'll be some price pressure [domestically] but maybe not quite as much as you would think, given that we export about 93 per cent of our lamb."
The value of the New Zealand dollar was a positive for consumers, helping to offset increases in prices.
The international price of lamb was converted back at the exchange rate to get an NZ dollar price, which helped guide domestic prices, he said.
The New Zealand dollar gained about 12 per cent against sterling in the year to August.
The price for 1kg of lamb chops in August was $13.86, down 2 per cent on the previous year.
But during the global financial crisis the currency had fallen heavily and the price for 1kg of lamb chops in the year to August 2009 increased 18.4 per cent.
However, Phil Journeaux from the Ministry of Agriculture and Forestry said the average sheep and beef farm in Southland was estimated to make a $30,000 to $40,000 loss this year.
"In terms of storms in September this would be the worst I've seen in my career, which is 30 odd years," he said.
"From our perspective we'd say the vast majority of farmers would be doing the best they could to look after their stock through this period, and the bottom line is there's obviously a very strong economic incentive for that, unfortunately we get these events when people are caught out.
"[Man-made shelters are] easy enough in one sense to build - the reason they're not [built] is you're looking at a massive capital cost and which is beyond the capacity of the farming system to carry."
