Economist says lamb prices running out of steam

After a stellar 18 months for lamb prices, a new report suggests they are on the wane.

An ASB commodities report said lamb prices opened in 2019 at $7.20/kg, some 45c/kg lower than where they ended 2018.

"From the peak price of $8.43/kg back in September, the per kg price has now fallen $1.23/kg (or around 15 percent),'' said ASB senior rural economist Nathan Penny.

He said the fall was a little more than expected.

"The average fall over the past five years from the spring peak to autumn low is around $1.20kg." 

"In other words, the fall to date has already exceeded the average fall with another two or so months before prices usually bottom out."

At $7.20/kg, lamb prices are considered healthy, however, Mr Penny said the steepness of the recent fall warrants a wary eye on lamb prices over the next month or two. 

"In particular, we will be monitoring closely how Chinese lamb demand develops given the broader slowing in the Chinese economy."