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B+LNZ Economic Service Director Rob Davison says all indications point to lamb prices staying strong for some time due to tight global supplies.

“We expect 19.3 million head of lamb to be exported, which is a drop of 7.7% compared to last season. This significant decrease is due to the adverse weather conditions during spring lambing. Despite the lower volume of lambs, higher prices will see export receipts for the season total around $2.6 billion – much the same as last year,” he was quoted in a report by Scoop.co.nz.

Davison says mutton prices are up due to the global shortage of sheepmeat. Farmers experienced record returns for mutton in the December 2010 quarter.

“The high prices were largely the result of Australian exports being down 24% in 2009-10. They are estimated to fall a further 11% this year – a combined decrease of 46,000 tonnes. This compares with New Zealand mutton shipments last year of 63,000 tonnes.”

Limited supplies of cattle from Australia and New Zealand, combined with robust demand for ground beef in the US, are keeping imported lean beef prices strong.

“The exchange rate will determine how this demand translates through to farm-gate prices. It is predicted that 2.17 million head of cattle will be processed this season, 3.5% less compared with 2009-10, when the slaughter tally was high because of drought conditions in the north.”

Wool prices are predicted to improve 40% for the year ended June 2011 – the highest wool price since the 1989-90 season. This is a result of wool inventories being run down in wool-buying countries in Europe and North America when they were trying to reduce debt. However, the woollen goods manufacturers in these countries now need to purchase wool to fill orders and this is driving the optimistic wool price outlook. — Source: Scoop.co.nz

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