Difficulties In Lamb-Price Forecasting

Press, Volume C, Issue 29684, 30 November 1961, Page 22

Difficulties In LambPrice Forecasting

“It is a fact that the lamb market is not truly predictable, nor for that matter are markets generally,” said Mr H. A. Seifert, spokesman for the New Zealand-owned freezing and meat exporting companies, in a supplied statement to “The Press” on lamb values. “Stocks to cold stores in the United Kingdom, the current rate of consumer demand there and the prospect of exceptionally heavy, early New Year arrivals are all having a depressing influence upon the assessment of lamb values by the meat exporters,” said Mr Seifert. “As at November 10, there were 32,300 tons of lamb and cuts in store to the United Kingdom as against 17,328 tons a year earlier. Stocks were almost doubled. “The take-off from stocks has since been lower than the corresponding rate last year. This has been influenced by the sharp drop in broiler values. This meat now exerts a powerful force on the trade. Its expansion over the last four to five seasons has produced a new supply of meat, equalling around 8 million lambs annually. “It is imperative that lamb prices be competitive, for three good reasons—first, to aim at reducing stocks rather than to see these increase and so further ‘bear’ the nlarket. “Second, so that lamb shall not surrender its market to chicken. Third, because those firms which sell our meat must be consistent traders, so as to hold their butcher clientele. They cannot ‘duck in and out' of trading by refusing to sell because they consider a current price too low at any period. That would be most damaging to the longterm interests of our trade. “In calculating a schedule here to New Zealand account must be taken of when a

lamb bought will become a carcase sold in Britain. Carcases bought this week will not be realised upon until next February and March. “Over all the seven last seasons, from 1955 to 1961, the selling value of our lamb has dropped sharply by March from its January level. The declines have ranged from a low of 4V4d to a high of 6V4d, and averaged above 5d per lb over the period. “Whatever relationship there may be at present between the Smithfield carcase price and the current week’s schedule price of lambs, is not a point of consequence. The consequent point is the relationship between the schedule price and a value in prospect three months hence. “Over the years, new season’s lamb in January has shown a premium of 2d to 3d per lb over old season’s. Operators have taken this factor into account and currently they are not very optimistic. "Far from being able to count upon any substantial premium on new season’s lamb, they rather fear that the arrival of this will force a discount upon the old season’s meat in stock. "However, unforeseen factors enter a market to upset the most knowledgeable and diligently calculated forecasts. A buying schedule is, and must be, based upon a forecast. There is no alternative. Nor is any farmer compelled to accept such a judgment from others. He can back his own judgment, ignore the schedule and dispose of his product through a number of alternative means," said Mr Seifert.