Warmer conditions after a late spring, plus excellent export demand, drive optimism

A late start to the spring slowed grass growth in the South Island, meaning some early lambs gained less weight than farmers look for. However, with plenty of rain, the season began in earnest once temperatures rose from late October.

Coupled with what have become excellent feed conditions, the current schedule and market outlook are driving strong prices through South Island cattle sales. Premiums are on offer for well-bred traditional breeds, and demand through the whole South Island is solid.

Meanwhile, as drafting commences on early spring lambs and with a favourable schedule in prospect, farmers are looking forward to excellent returns for lamb and mutton. Back slightly due to the earlier colder conditions, lamb weights stand to catch up quickly with the better weather that has prevailed more recently.

As ever, China has a significant influence on the red meat market. Chinese demand for protein remains high, particularly relative to the continued incidence of swine flu affecting China's domestic pork production. Australian farmers rebuilding their national cattle herd and sheep flock after several dry years, retaining capital stock they would otherwise finish, underscores New Zealand's excellent short and medium-term global position. Strong demand for chilled lamb from the traditional United Kingdom and Europe markets also underpins these good prospects.

Shane Gerken, PGG Wrightson South Island Livestock Manager