Sheep and beef farmers buoyed by strong prices and demand

Stuff, GERARD HUTCHING, December 29 2017

Sheep and beef farmers are more upbeat about prospects than at any time since November 2014, the latest Beef+Lamb NZ confidence survey shows.

Confidence has risen to 59 per cent, up 16 per cent, since the last survey in August and has been attributed to strong product prices, growing demand for meat from an increasing population and belief in the quality of the product farmers are producing.

All regions showed a positive sentiment, with the strongest in the eastern North Island and central South Island.

Beef+Lamb NZ chief executive Sam McIvor cautioned the survey was carried out before the latest dry conditions.

ASB rural analyst Nathan Penny said 2017 had been “one out of the box” for lamb prices.

“From about April through June, prices spiked well over $6/kg. Then from July through to now, prices kept going, peaking at $7.30/kg. These prices are the best since 2011.”

“Moreover, the price surge came out of the blue. Indeed, prices started 2017 mediocre levels, giving no hint of the price surge to come. Heading into 2018, we think prices can remain healthy. The majority of factors underpinning prices are likely to remain in play. Also, we are unlikely to see a pick up in supply from either here or across the Tasman,” Penny said.

Among the reasons for farmer lack of confidence, the new Government ranked a low 9th, with just 8 per cent of those surveyed mentioning it.

McIvor noted positive news on the trade front with significant benefits that would come out of the revised TPP.

Meanwhile Alliance Group has been making further inroads into China with a lamb promotion on Tmall, operated by e-commerce giant Alibaba and one of the country’s major online sales events.

Featured in a video were award-winning Alliance Group farmers Hamish and Annabel Craw of Longridge Agriculture, who farm sheep over 422 hectares of hill country farm on Banks Peninsula.

Alliance has been working in China since the mid-1990s and is now the country’s largest exporter of New Zealand lamb to the country.

It has a long-standing relationship with its Chinese partner Grand Farm, a well known distributor and marketer of red meat in Northern China. Alliance exports a range of New Zealand-packed product, specially designed for the Chinese market and co-branded Pure South and Grand Farm.

The largest processing co-operative said it would continue to invest in new products and ranges that would be either produced in New Zealand or further processed in the market to meet the growing demands of China’s consumers.

In June, Alliance was the first New Zealand company to export chilled lamb to China as part of a chilled trial programme. Alliance also recently purchased Singapore-based sales and marketing company Goldkiwi, which is now known as Alliance Asia.

Based in Invercargill but with plants throughout the country, Alliance has 5000 farmer shareholders.