Price Outlook Not Rosy

Press, Volume CVI, Issue 31167, 17 September 1966, Page 8

Price Outlook Not Rosy

Of particular concern to producers at this stage is the outlook for the opening lamb price, which will soon have to be fixed by exporters, and just at present the prospect is not too rosy.

Over the last two months the price of New Zealand lamb on Smithfield has been slipping steadily. Between late in June and early this month there was a decline in price of from 3|d to 6d a lb, with the biggest drop being on heavy lambs. This is a time of the season when a decline in the market can be expected as homekilled lamb reaches the market, but this season the decline has been more marked than in recent seasons and as at September 9 the price for prime 29 to 361 b lamb was 4jd a lb lower than a year ago. Steadier There has, however, been some sign just lately that the lighter lambs were tending to steady and that the market may have reached or be nearing rock bottom. For heavier lambs the trend has, however, continued to be downward and unhappily it seems that these may predominate among New Zealand lambs now available. A number of factors have been responsible for the weakening market in recent weeks. There have been heavier supplies of both homekilled beef and sheep. The average weekly slaughterings of sheep in the United Kingdom in July were up by 14

per cent on the previous year and cattle slaughterings were up by 12 per cent. The breeding ewe flock in England and Wales is 1.2 per cent higher than a year ago and it is reported that there has been a 2.1 per cent increase in the number of lambs.

Fresh lamb passing through Smithfield in July was 22 per cent up on the same month of last year and supplies of imported lamb have also been higher with a sharp increase in pitchings of Argentine lamb.

Other factors responsible for the weak market has been the action of butchers quitting supplies built up as a safeguard against the continuance of the shipping strike and the current tight financial policies of the United Kingdom Government and the high cost of overdrafts.

The latest London market summary published by the market information service of the Meat Board also points out that increasing supplies of Home killed and imported beef has been a feature of the market during the last month. While the overall average weekly throughput of beef was higher by about 7J per cent during July compared with July, 1965, the July throughput of fresh beef was 20 per cent above the figure for July, last year. The average Briton is also unhappily eating more chicken. For the current year it' is estimated that there will be a further rise of 10 per cent in consumption of this meat on top of a 20 per cent rise last year on 1964. But there are still a few bright spots. Stocks of im-

ported lamb held in the United Kingdom have been running well behind last year at this time and are not a cause for concern.

Still, unless the market takes some unpredictable turn—and this is never beyond the bounds of possibility—present indications are that next month’s opening price could be quite a lot below the 20jd a lb paid for the 29 to 361 b lamb last October. Support

Always standing behind the schedule price is the deficiency payments scheme and meat industry reserve account funds will be used where the value of the meat content of the schedule falls below 16,1 d for 29 to 361 b prime Down cross lamb.

Deficiency payments were last made in 1962 and in that season they amounted to about £2.4m.

Freezing or processing charges are a factor in the schedule and any early announcement of an adjustment in the general level of wages would have to be taken into account, and since last season there has been a rise in shipping freights. On the other hand, off-set-ting these charges are the returns from by-products. Pelts from last season’s kill have been bringing big money in line with trends in women’s fashions and it seems likely that this commodity will continue to be a good seller in the coming season. Wool at the moment is variable commodity, with fine wool selling strongly and coarser wools relatively poorly.