Drought hits meat prices hard
Hawke's Bay's days as a major sheep producing area are being threatened by sharply dropping prices, and are being hit even harder by drought which lopped about $1.5 million off the value of the North Island lambkill in just one week.
Figures have been revealed by domestic marketing representatives Beef and Lamb New Zealand.
Chairman and East Coast North Island director Mike Peterson said sheep and beef farmers are looking at a halving profits this year because of the affect of low lamb prices and the drought.
The worsening situation was highlighted last week when about North Island 340,000 lambs went the meat plants an average $4-plus per kilogram lighter than the 185,000 that went through the works in the same week last year.
A wider effect can be calculated from the decline in sheep and cattle numbers in a quarter of a century.
By 1990, the notion that New Zealand was a country of 70 million sheep was already history, with the sheep population placed at 57.85 million, of which almost 12 million were on the east coast (East Cape to Wairarapa).
The most recent figure, for June 2011, put the nationwide figure at slightly more than 31 million, and the east coast figure at 7.4 million.
To try and cut some of the losses, some large stock numbers have been sent to greener pastures in the South Island, where lambs killed last week were about the same weights as those killed about the same time last year.
The figures come as some forecasters say a continuation of the drought could lop $1billion from the nation's economy, or 0.5 per cent off gross domestic product for the year with ongoing implications next year.
Mr Peterson said estimates are that East Coast farmers' profit before tax for the 2012-2013 season will fall 54 per cent, to an average of $72,400.
"There's no doubt that this is a tough season, with dry conditions also taking a toll," he said.
"As well as lower prime livestock returns, store stock prices are down, as higher than usual numbers head for the stockyards."
The lower lamb prices came as a consequence of high lambing percentages, but also followed near-record prices last season.
