Winter supplies of prime lambs and cattle are rapidly declining following a larger than usual kill in late summer and early autumn.
AgriHQ data up to mid-May shows the North Island kill was 7.1% ahead of the same time last year (6.12 million compared to 5.8 million) and 9.6% in the South Island (7.91million compared to 7.22 million).
Nationally, the prime cattle kill is 5% ahead (847,000 compared to 803,000).
The high early kill also reflects that for the first time in several years processing companies have not been short of staff.
Alliance livestock manager Murray Behrent said more stock have been killed this year on five sheep chains at its Lorneville plant than on six and a half chains last year.
The prime lamb kill has been well above the five-year average, prompting some meat companies to now start paying procurement premiums and to seek mutton to fill chains.
AgriHQ senior analyst Mel Croad said the higher lamb kill was due in part to many areas being dry and short of feed.
Those conditions, combined with low farmgate prices, created a weak store market with those lambs killed earlier than normal, which has created a shortage of finished lambs.
Another factor is that unlike previous seasons, meat processors have had ample staff so were able to ramp up production when it was required.
Croad said because of the lower demand from store lamb buyers through April, lambs that have made their way through to processors have lower conditioning.
Compared to a year ago, May average weekly lamb weights were back nearly 1.5kg in the North Island and 300 grams in the South Island.
Growing conditions have been more favourable in parts of South Canterbury and finishers from there have in recent weeks bought store lambs from the North Island to secure the numbers they require.
Meat companies have in recent weeks lifted mutton prices, adding 20-25c/kg to the AgriHQ mutton indicator, which Croad said appears to be driven by procurement needs rather than improved market prices.
A lengthy autumn cattle kill saw weekly slaughter rates exceed 80,000 head a week by late April as the cow kill peaked.
Croad said higher than anticipated slaughter rates for prime cattle earlier in the year has exhausted market-ready supplies, leading to a recent surge in farmgate pricing.
Based on Beef + Lamb NZ forecasts through until the end of September, there could be significantly fewer cattle left for processing than at the same time last year.
Alliance Group livestock manager Murray Behrent said companies have killed the same number of lambs, it’s just that they have killed earlier.
Dry summer and autumn conditions in Canterbury saw fewer store lambs flow into the region and these were killed earlier at 18.5-19kg instead of 22-23kg over winter.
Behrent said other than an early closure of the second chain at Smithfield, Alliance is following its normal winter plant shutdown programme – but sourcing stock to keep plants operating until the bobby calf season next month will be challenging.
Companies have product to fill orders.
Silver Fern Farms chief supply officer Jarrod Stewart said following a few years of a flat supply profile, this season has been markedly different with a more advanced kill and lower than usual livestock flows heading into winter.
“Contributing to this season’s supply profile was our ability to have greater capacity during peak season combined with a drier autumn.”
In the coming months, he said, the focus will be on striking a balance between supply, capacity, labour and cost.
Croad said in-lamb ewes have been excellent buying at significantly lower prices than last year, but tight feed conditions mean few farmers have been able to take advantage.
“They can’t make it work because some key breeding regions have very little excess feed.”
Surprisingly, given low farmgate lamb prices, Croad said, some heavily-processed cuts such as boneless legs are making higher prices in export markets than bone-in legs.
In Focus Podcast | Winter supplies of prime lambs and cattle in decline
Senior Farmers Weekly journalist Richard Rennie is subbing in for Bryan this week.
He speaks to fellow senior journalist Neal Wallace, who takes a look at the dire shortage of livestock available for processing this winter, what it means for plant shutdowns and markets.
He also reports on the Parliamentary Commissioner for the Environment’s terse words for environmentalists, calling for solutions not problems when it comes to realistic development to help NZ pay its way in the world.
