A lamb and calf skin processor says a combination of the world recession and the high New Zealand dollar have savaged demand and prices and forced it to cut back production.
The Southland-based Slink Skins company processes the carcasses of dead lambs and calves collected from farms around the country.
Manager Ray Watson says calf skin prices have halved in recent months and lamb pelt prices have fallen by 30 to 40%, partly due to the world recession and partly New Zealand's currency.
Mr Watson says he doesn't know whether the price fall has bottomed out yet.
He says there is a stockpile of untanned skins around the world because two areas where calf skins are used, the car market and furniture manufacture, are in a slump.
Mr Watson says that's forced it to be more selective in the skins it processes this year to avoid adding to the stockpile.
Calf skins are used for leather furnishing and lamb pelts for gloves and other garments.