Australia has eye on NZ's traditional lamb markets

By GREG ANSLEY

CANBERRA - Australian lamb exporters are likely to slice into traditional New Zealand markets as Kiwi production falls and emphasis swings to high-value sales in continental Europe.

The challenge comes as Australian farmers increase their production of prime lambs, bolstered by prices that are expected to rise over the next five years.

This year Australian lamb exports are forecast to rise 5 per cent to 95,000 tonnes.

The big opportunities will come, says industry analyst Vince O'Donnell, as production falls in New Zealand, squeezing its ability to supply traditional markets.

In Australia, the potential has already been recognised by a growing number of producers.

Last year, about 16 million lambs were killed from a total sheep flock of only about 115 million - equivalent to the number processed in 1990, when the flock was 173 million.

Mr O'Donnell, agricultural economics section manager at the Australian Bureau of Agricultural and Resource Economics, said yesterday that New Zealand lamb production was expected to continue to fall.

He told a bureau conference in Canberra that the Kiwi industry was being crimped by the expansion of forestry and dairying.

The decline in production would be slowed - but not halted - by gains in productivity through higher lambing percentages and increased slaughter weights.

"Faced with continuing lower lamb production, the New Zealand industry is expected to continue focusing on the development of higher-value lamb export markets, particularly those within continental Europe, such as France and Germany," said Mr O'Donnell.

"This may create opportunities for Australia to direct additional shipments of lamb to some of New Zealand's traditional export markets, such as the United Kingdom."

Exports of Australian lamb to Britain last year rose 11 per cent to 7500 tonnes.