Lamb-shipping costs still going up

Press, Volume CXV, Issue 34021, 10 December 1975, Page 12

Lamb-shipping costs still going up

GV Z. Press Association) WELLINGTON, December 8. The cost of getting a frozen “PM” grade lamb carcase from the New Zealand farm gate to the British market may rise 25 per cent this season. A Meat Board publication, the “Meat Producer,” today carried an article by the board’s economic research officer, Mr G. T. Harrison, which predicted that it might cost $11.16 to get a 13.6 kg “PM” grade carcase to Smithfield this season. Last season it cost $8.94. The calculations demonstrate the cost-price squeeze facing sheepfarmers. So while it is true that New Zealand lamb is selling for record prices in Britain, the cost of getting it there is now also a record. Thus the return to the New Zealand farmer has remained virtually static. What increase there has been is the product of earlyseason incentives, exporters’ market optimism, and a reasonably buoyant market for pelts and wool. Since April this year British prices for New Zealand lamb have risen between 8c

and 10c per kg —- up to $1.30 a carcase. But at the same time the cost of getting the carcase to Britain has increased $2.22. Farmers have therefore been faced with an increase of 16c per kg in the cost of getting their lambs to their main market, Britain, over the last year. Mr Harrison said his estimate for this season was based on the cost of having [a 13.6 kg North Island “PM” [grade lamb slaughtered in [ mid-January, shipped in midi February, and sold ex-hooks |at Smithfield in mid-April. “This projected cost has been calculated on a market price of 32p a pound,” he I said. ‘-‘lt includes some ■allowance for further increases above current rates ! for killing and freezing 'charges, railage, and wharf I handling.” Mr Harrison has calculated that most of the increase in the cost will be outside New Zealand. He : predicts that it will cost $3.83 this season to transport a lamb to, a freezing works, kill and process it, and transport it and load it in the ship. Last season it cost $3.40 to do this. [ This season it will cost I $7.33 to ship the carcase and lallow for it to enter Britain.

Last season this cost onlv $5.41. The biggest single increase is in the British lamb levy, which will rise from 12 per cent to 16 per cent of the value of the lamb. The levy now takes up 21.5 per cent of the cost of getting a lamb to London, freight 25.9 per cent, and killing and freezing 24 per cent. Other freight and administrative costs make up the rest. There is no end in sight for the cost increases facing sheepfarmers. The levy is due to rise again in 1977, to 20 per cent. There is provision for the shipping freight rates to be reviewed midseason; and the Labour Government has only suspended the charge of 12.7 c a carcase for meat inspection which [has traditionally been levied on each carcase exported.