Fewer lambs result from the fall in breeding ewe numbers. At the end of June, there were estimated to be 17.8 million, down 1.9% from a year earlier.
"The expected small lift in lambing percentage is not enough to offset the drop in breeding ewe numbers, hence the now expected decline in lamb numbers. After accounting for retentions, it all suggests there will be around 19.3 million lambs available for export, similar to the season just ended.
"Meanwhile, lower sheep numbers is expected to see export mutton production in 2017-18 fall by as much as 9% from the 2016-17 season. All this sees us tab down our overall meat export volume growth forecasts for the 2017-18 season.''
A smaller supply of lambs could improve their prices.
"Reports of very little inventory held through the supply chain supports this view, although, as ever, actual pricing at the farm gate will also depend on the weather and currency levels.''
Future weather could affect lamb weight gain, which was known anecdotally to have been be slow so far.
Wet conditions have delayed crop-planting in some areas.
"This may cause issues later in the season depending on how weather conditions unfold from here.''
B+LNZ expected export production would to be marginally lower in 2017-18 than the previous season, due to expectations of lower weights and static slaughter numbers.
"This follows from both breeding cow numbers as at the end of June 2017 and expected calving percentages being much the same as a year earlier,'' the report said.
"Little change is expected in the dairy cow cull that returned to more normal levels in 2016-17.''
In the dairy sector, early-season milk production was hampered by wet weather. August milk yields were down 1.5% on last year, which itself was down 3.0% on the previous year.
"September may be no better. Milk production is ramping up in spring, but we suspect it will not be quite as strong as it usually is given recent weather conditions.
"We still expect milk production this season to be higher than last season but not quite as much as we previously thought, maybe up in a 1% to 2% range rather than a +3% to +4% range. This, in turn, sees us temper our dairy export volume forecasts in 2017-18 by a couple of percentage points, although moderate growth in real export values is still expected as more milk continues to get directed towards higher-value products.''
Tempered meat and milk growth outlooks would take about 0.7% off overall export growth forecasts for the coming year, the BNZ team said.
"On a positive note, primary product prices as a whole are very buoyant and coupled with subdued import prices we think they will help lift New Zealand's terms of trade to an all-time high in 2017.''
