Heavy U.K. Stocks Reason For Drop

Press, Volume C, Issue 29674, 18 November 1961, Page 10

Heavy U.K. Stocks Reason For Drop

The decline of IJd a lb for all classes of export lamb —the first decreases since the season opened almost a month ago—represents a drop of 9 per cent, in the price paid to the farmer for prime 29 to 361 b lambs and of 14i per cent, for prime heavy iambs weighing between 51 and 561 b. A declining trade in New Zealand lamb in the United Kingdom in the face of a sustained supply of Homekilled lamb and beef and continuing heavy stocks of imported lamb in the United Kingdom, with the prospect of old season’s lambs still being in store when the new season’s kill begins to arrive, are given as reasons for the latest movement in the schedule.

When the opening schedule was announced in the South Island on October 20, New Zealand lamb was showing a much brighter trend on Smithfield market. Between the beginning of September and the schedule opening there had been a recovery in prices of from l|d to 5d per lb Since then the trend has been downward again with all classes of prime

lambs losing Id between mid-October and November 10 and fair average quality depreciating by lid to IJd a lb. Influx of Lambs A meat industry spokesman in Christchurch said last evening that the principal reason for the falling off in sales of New Zealand lamb was the influx of English lambs. A recent report from the Meat Board’s London correspondent spoke of the number of sheep coming forward each week in the United Kingdom continuing to rise with certifications very close to the peak reached in October, 1959, the year of unprecedented drought and killings in Britain. On top of this, supplies of imported lamb in stock are continuing at a high level. According to recent information they are still standing at between 33,000 and 34,000 tons, which is about twice the level of holdings a year ago. At this time it might be expected that holdings would be tending to tail off with fair to average sales and limited shipments arriving, but this does not seem to be materialising and the prospect is that there will still be old season’s lambs in hand when new season’s shipments arrive next month.

Another deterrent to lamb sales has been the plentiful beef on the British market. With heavy offerings of Home-killed and Irish beef the London correspondent of the Meat Board reported recently that supplies in September had been 4 per cent, greater than a year earlier. In a recent weekly period the

slaughter of about 67,000 cattle was certified for subsidy purposes and it is to be expected that the ban on meat imports recently imposed by Italy will have diverted further supplies of beef to the United Kingdom from sources like Jugoslavia. Another factor in the lower schedule is a decline in the price of pelts of about 10s to 15s a dozen since the killing season opened. At Is to Is 3d a head this amounts to about a halfpenny a lb on a 301 b lamb.

With the heavy early killings of lambs this season on account of dry conditions, operators say that lambs which will he killed now will not reach the market before February, so that they have now to take into account the probable market at that time. Deficiency Payments It seems unlikely that any deficiency payment will be fixed by the Meat Export Prices Committee on the present schedule, though it was not possible to confirm this in Wellington last evening. It is believed, however, that the new schedule is close to floor price level, and is no more than a halfpenny a pound away and possibly closer. Deficiency payments are fixed for lamb on the prime Down cross 29 to 361 b lamb when the meat content of the schedule price falls below 15d. The payment then arrived at is applicable to all weights and classes of lamb. The last deficiency payment on lamb were paid in the week ending December 5. 1959, and in that season total payments on lamb amounted to £377.562.