Beef and sheep prices take small drop

Beef and sheep prices take small drop

Sheep and beef prices have dipped slightly following a slackening in global demand, but the sectors are still looking healthy according to the ASB.

The latest ASB New Zealand commodity price index has kicked off 2015 with a fall in all denominations, owing mainly to the falling sheep/beef index.

In United States dollar terms, beef prices have dropped 3.4 per cent and sheep prices are down 2.7 per cent.

The index showed dairy prices flat but had been recorded before this week's overall rise of 3.6 per cent following the Global Dairy Trade auction.

ASB economist Nathan Penny said that while there had been a fall in beef prices, they were still higher than what they had been in 2014. Sheep prices had come back to about the same level as in 2014.

"The lower prices are not unexpected as there has been weaker demand and a lot of lamb around from Australia and the United Kingdom," he said.

"A lot of it is this time of the year when we get a bit of a tail-off following Christmas and things are quiet until they get some more list later in the season.

"We didn't think the high beef prices would last because of consumer resistance," Penny said.

He said the fall in oil prices would benefit farmers through lower fertiliser and fuel prices, although these two were not "massive" parts of the cost structure of most New Zealand farms.

The common theme dragging down both oil prices and New Zealand's export commodities was sluggish global demand.