Storage plan for N.Z. lamb in U.K.

Press, 2 September 1981, Page 15

Storage plan for N.Z. lamb in U.K.

PA Auckland Sectors of the meat industry plan to avert a crisis in the British market, which is still a big outlet for New Zealand lamb. Action is regarded as imperative to counter the highly unfavourable effects of the European Economic Community’s sheepmeats regime and to gain a high and stable price for New Zealand lamb during the first six months of the year. An Auckland exporter, Mr W. F. Leonard, who is playing a leading part in the new plans, said that the Meat Exporters’ Council and the Meat Producers’ Board had reached basic agreement on the principle of a marketrelease programme which was designed to control the flow of lambs compulsorily week by week.

Mr Leonard, who is a former chairman of the Meat Exporters’ Council and who is a member of a joint Meat Exporter’s Council— Meat Board committee which has been working on a new programme, is also managing director of the Aucklandbased co-operative, Producers Meats, Ltd. He said that the marketrelease programme would involve the compulsory storage in Britain of the surplus lamb from any shipment. The object would be to release stable and regular quantities of lamb in the market by having the right amount available at any time irrespective of shipping delays. Mr Leonard said, “we did not envisage building up large stocks of lamb in britain. But we need total control of the number of lambs available each week for distribution into the market svstem. “About 75 per cent of our total lamb shipments to Britain in a year will have to be sold from January to June during the period when we are not competing with British lamb and when we can be price setters, not price takers.

‘■During this period there is no reason why we cannot get stability in the market at quite high average prices. ‘'From July to November, when British lambs dominate the market, the important thing for New Zealand is to have only light supplies available.” Mr Leonard said that the unstable price for New Zealand lamb during the present season showed that New Zealand was now feeling the full effects of the European sheepmeats regime. Unless action „was taken

along the lines envisaged. New Zealand would have a real crisis on its hands in a market in which it was still going to be very dependent now and in the future. “While we are now selling slightly more lamb in the Middle East than we are in Britain, the Middle East is not a stable market,’’ Mr Leonard said. “With an expanding volume of lamb production, where would we be if we suddenly Jost the market in Iran? We are now down to selling about 40 per cent of our lamb in Britain and it is absolutely imperative that we do something about, strengthening that market.”

Mr Leonard said that with the European sheepmeats regime, what the politicians had not realised was that the price guaranteed to British farmers came not from the British taxpayer but from Brussels. This meant that there was no pressure on the British Government and no incentive for the British farmer to maintain the market price. New Zealand was having to compete in a situation where the British farmer was getting $97 a lamb at the beginning and end of the season without any effort and $BO at the peak. The price guaranteed from the Common Agricultural Fund had given the British farmer an incentive to increase his lamb production. The E.E.C. “clawback” regulation had virtually killed the British lamb trade to France with the result that the increased production was all going into the British market. In such circumstances New Zealand had to take action to survive in the British market. During the two months to July 31. the price of New Zealand lamb had dropped by 20 per cent from 68p a pound to 54p a pound. During the same period the market price of British fresh lamb had dropped by 30p a pound, or 35 per cent, indicating that New Zealand had done quite well in the circumstances. New Zealand now had to act to get its price up by regulating the flow and by overcoming any shipping problems during the period of the year when this was possible.