18 Sep 2012

Skin trade cuts help pare farmer incomes

6:48 am on 18 September 2012

New Zealand's largest sheep processor and exporter Alliance Group says cuts to prices paid for skins have contributed to falling income projections for beef and lamb farmers.

The Alliance co-operative has 5500 shareholders and executives has just attended a leather fair in China, where many of its about eight million skins go each year. That trade accounts for about 5% of the company's revenue.

Alliance Group marketing manager Murray Brown says prices have dropped 25% from historical highs of about $138 for a dozen lamb grade skins.

But Mr Brown says the longer term outlook is more positive, because there are projected shortages in the medium-term supply of skins.