Meat, wool outlook seems to be good

Press, 8 June 1979, Page 9

Meat, wool outlook seems to be good

The outlook for both meat and wool looks to be promising.

Between 85 and 90 per cent of New Zealand’s beef exports are likely to go to the higher-priced American market this year, according to a situation report from the Ministry of Agriculture and Fisheries. The current demand for beef in the United States was strong, but a lot would depend on future American consumer and producer responses to such high prices, said Mr Brian Bell, the Ministry’s chief agricultural economist. "Prices are expected to remain buoyant for at

least the next two seasons. Big increases in United States beef prices last season continued this year, reflecting reductions in their herd numbers. “Schedule prices to New Zealand producers have risen considerably as a result, and the margin between prime and manufacturing beet has narrowed. “This has been due to the high price of manufacturing beef in the United States. As a result, little difference is expected in the average schedule price between cow and steer beet this season. “An all-grades farm gate average price of about 102 c per kg, after levy deductions, is expected.” Lamb had been an exception to the over-all upward trend for meat, said Mr Bell, but prices were now firmer and increases were expected. “The United Kingdom lorry-drivers’ strike and loss of the Iranian market wiped out the lamb season’s good start. “Imported lamb stocks in the United Kingdom are currently about twice those held at this time last year. Prices are, therefore, still depressed, but indications are that they will firm and increase during the remainder of the season.

“The average prime pm grade lamb schedule price at tile end of the season is expected to be around 75.5 per kg. Last year’s figure was 66.9 c. “Last season’s mutton price depression continued into the early part of this year, mainly due to lowlevel Russian puying.

“Prices have now improved markedly with sales of 50,000 tonnes to Russia, and other sales to Japan and South Korea.” With most of this season’s mutton production already sold, Mr Bell said, the outlook was for favourable prices to continue. The all-grades average farm gate price for adult sheep was expected to be around $lO a head. The average auction price for wool over the whole season should be around 220 c per kg, or some 15.5, per cent above last season’s 190.43 c per kg average, according to the Ministry. Higher sheep numbers at June, 1978, resulted in increased total wool production, said Mr Bell. “A good growing season to date indicates that wool production for 1979/80 could also rise, to around 320-325 M kg. “Higher prices this season enabled the Wool Board to dispose of about 90,000 bales from its stocks by mid-April. “Board stocks at the start of the season stood at almost 202,000 bales. Further significant reductions of these supplies are expected before the close of the season."

The outlook for 1980 seemed good, said Mr Bell. Competition from synthetics, increased world wool supplies, and rises in raw material costs should be offset by moderate economic growth in most major wool consuming countries.

“Estimates at this stage indicate an average auction price for 1979/80 of around 230 c per kg.”