Farmers would do no harm working towards a conservative budget of $100 to $105 for an average sized lamb, says Silver Fern Farms chief executive Keith Cooper.
Cooper said Beef+Lamb New Zealand’s forecast of $105 for a 17.9- kilogram lamb this season for upper South Island farmers was a reasonable indication of where prices would head.
"That’s not a bad guide, based on the marketplace and the dollar being where it is today, and that’s fair and reasonable."
The modelling for this price was based on the New Zealand dollar trading at US81c.
Lamb values appear to be down on last season’s $116, with Beef+Lamb blaming the higher dollar for the lower forecast.
Cooper said it was too early to tell conclusively if new season prices would average out at $100 to $105, but this would still be a good level for farmers if it materialised.
"The markets are pretty stable and there is some pushback, but the currency is up 20 per cent on last year. We have to take that price indicatively as a guide. It will not be a major fall, but it will be less because the currency is higher."
The pushback is from some meat customers looking at alternatives because of lamb prices increasing.
Cooper said farmers could take confidence the 2010-11 season was not a "one-season wonder".
"I’m probably on the page of a $100 lamb would be a pragmatic and conservative point to take, but that’s for a 17.5kg lamb."
http://www.stuff.co.nz/business/farming/5598085/Farmers-warned-high-kiwi-will-hit-prices-for-lamb?
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