18 Jul 2016

Forecast lamb prices take a tumble post-Brexit

1:20 pm on 18 July 2016

Forecast lamb prices are taking a severe hit as the implications of Brexit sink in, AgriHQ says.

rack of lamb

Photo: 123RF

New Zealand has a quota of 280,000 tonnes of sheep meat access to the EU which comes tariff free - with half of that being taken into the UK.

Last year, the EU took $2 billion worth of New Zealand beef and lamb.

Beef + Lamb New Zealand said there was uncertainty around how the exports would be split and where there would be demand in future, but the quota would continue.

AgriHQ analyst Susan Kilsby said the market intelligence company's forecast for lamb had fallen because of the uncertainty in the market post-brexit.

"Price forecasts for the month of October show an average price of $5.75/kg, this is down from a monthly average of $6.25/kg last year and a five-year average for October of $6.50/kg."

Prices through October were typically underpinned by demand for chilled product to supply the UK and EU Christmas trade, she said.

"The much lower levels as a result of the higher New Zealand dollar will be a financial blow for many farmers who supply this market."

Ms Kilsby said, if the New Zealand dollar remained high into the new season, then it would have far-reaching implications for farmgate prices much further out than October.

The forecast also took into consideration the tight supply, and picked procurement levels to be holding close to or slightly above five-year averages, she said.

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