A new Rabobank report on New Zealand’s sheepmeat sector states that market signals indicate “healthy” projections for lamb production in the country next year, after export values plummeted in 2023-2024. To seize the opportunity, however, the sector will need to adjust its strategy, the report says.
“The good news is that 2023/24 was likely the bottom of the cycle, and based on supply and demand dynamics, projections for lamb in 2025 and beyond show upside potential,” said Rabobank’s Senior Animal Proteins Analyst, Jen Corkran. “If the sector adopts a strategic approach, we believe the medium-to long-term growth potential could be greater starting in 2026.”
The report highlighted three pathways to improving returns, including growing the domestic sheepmeat market, diversifying export markets, and increasing investment in research and development to boost competitiveness.
According to Rabobank, New Zealand exported about 95% of the sheepmeat produced in 2023 — half of these 296,000 tons of lamb exports went to China.
In neighboring Australia, export dependence is much lower: 37% of the lamb produced is consumed domestically.
Corkran noted that marketing aspects of the product, such as its health benefits and how to cook it, could help boost demand in New Zealand, but the current retail value is a challenge.
The main markets (China, the European Union, the United Kingdom, and the United States) should also be reassessed for opportunities, according to the report. “New Zealand should be smart and careful in finding a good balance of trade partners for both commodities and differentiated products in the coming years.”
Rabobank believes New Zealand could increase the volume of high-value chilled products to the UK. The country is also well-positioned to fill a supply gap caused by the declining size of the English flock.
Corkran added that there are further opportunities in the US market. “However, sheep meat is a small part of US retail, and to maximize shelf space, New Zealand must find a way to increase existing stock at retail or alternatively focus solely on food service.”