The Price of Lamb v’s the Value of a FutureTuesday, May 22, 2001
The perverse machinations of the export meat market have become evident in the prices being paid for
late season export lambs at Southern North Island sales.
South Island producers must be a little perplexed at the willingness of the South Island export companies
to chase lamb supply at almost any price when for the majority of their season they are unwilling
to reward their producers with a price that is comparable with North Island prices.
It seems that the meat industry is off on another round of destructive behaviour as the repositioning
and influence game is played out between the companies. The notable large North Island cripple must
be slightly bemused at the possibility of the other companies dissipating their current advantages
in a market slug out.
Perhaps from a shareholders point of view the closeness of the seasons end may save an unnecessarily
large leak in each of the competing meat company’s profitability. But are we again seeing the
positioning of company’s to acquire market power even if in the short run it destabilises
the market for farmers.
If the meat industry end game is to be a processing monopoly, stock producers must take notice of the
likely owners and there interest in serving the industry or serving their own ends.