International sheep meat production is predicted to drop by more than 150,000 tons (carcass weight equivalents) over the next five years among the major sheep meat-trading countries, the industry-funded agency Meat New Zealand said in a report.
According to the agency, New Zealand's sheep meat production is predicted to drop by up to 50,000 tons or nine per cent and any decline in local consumption levels will slightly offset the impact of lower production on the volumes available for export.
"Because of lower production levels total exports will fall, which will lead to strong demand and good prices for imported sheep meat, particularly lamb, in key markets," chief executive Neil Taylor said.
"Quality lamb will be in particularly short supply, especially if demand in the USA grows."
New Zealand is the biggest exporter of sheep meat worldwide, with nearly 75 per cent of the total. According to Taylor, the recent foot-and-mouth crisis in Europe is likely to distort sheep meat trade patterns for at least 18 months with an oversupply of the product in Britain likely until the end of next year.
But once the ban of British exports was lifted, local demand and prices were expected to increase, strengthening demand for NZ lamb, he added.