Watering the green shoots in New Zealand sheepmeat

New Zealand lamb is a premium but niche product. Although the long-term outlook is positive, the current down cycle in New Zealand sheepmeat highlights the need for change to create more consistency in earnings along the supply chain.

The good news is that the 2023/24 season likely saw the bottom of the cycle. Based on both supply and demand dynamics, lamb price projections for 2025 and beyond show upside. If the industry takes a strategic approach, the medium- to longer-term upside could be greater from 2026.

RaboResearch believes three pathways could help lift earnings through the cycle: reassessing trade and diversifying export markets away from China, investing to boost the competitiveness of New Zealand sheepmeat, and focusing on increasing domestic consumption. But further steps will be needed to enhance returns in local and export markets, reduce costs along the supply chain, and improve the consistency of earnings through this and future cycles.

We see some welcome opportunities that will help ensure New Zealand’s sheepmeat supply chain emerges from the bottom of this cycle with improved earnings. A focus on differentiation and efficiencies may help smooth out future cycles and ensure consistently strong farmgate and export returns.