A reduction in the size of the New Zealand sheep flock will lead to a fall in the volume of sheepmeat exported in the coming year, a report from Beef and Lamb New Zealand has shown.

According to its New Season Outlook for 2015-2016, New Zealand lamb exports are expected to reach NZ$2.76 billion (€1.49 billion) in the 2015-2016 season, which is down 4.2% on the year before.

For the year ending September 2016, the export lamb slaughter is forecast to decrease by 7.4% to 19.4m head. The volume of lamb meat shipped is also expected to decrease by 6.3%.

This drop is expected due to a smaller lamb crop, which has fell by 1.8m head on the previous year and an increase in the number of hoggets retained within flocks.

However, despite the increase in hogget numbers, the national flock continues to contract, with ewe and hogget numbers down by 4.5% and 2.6% respectively in June of 2015 compared to a year earlier.

New Zealand sheepmeat exports

New Zealand sheepmeat exports were marginally up (1.9%) in 2014-2015 on the year before, with exports to Europe rising by 2% during this period, the report shows.

A rise in shipments to Germany, Netherlands and Belgium, was partially offset by lower exports to Great Britain, the largest market for New Zealand lamb.

This coincided with increased production in Britain and lower exports due to a strong Sterling, which put pressure on prices, according to Beef and Lamb New Zealand.

North Asia remains New Zealand’s second largest export market, accounting for 22% of total lamb exports.

Within North Asia, China was the largest market for New Zealand lamb.

The report also shows that sheepmeat production is China is estimated to grow by 2.5% per annum, while consumption is expected to rise by 3.4%.

Higher prices in 2013-2014 acted as an incentive for Chinese farmers to increase domestic production causing local production to be relatively competitive with imported products.

This competition had a negative impact on New Zealand exports of sheepmeat to China, which fell by 21% in the first nine months to June 2015, compared with the same period in 2013-2014.