LAMB
More lamb schedules lifts this week, as supply tightens and processors desperately try to satisfy regular customer requirements.
Chilled negotiations are having to cover exchange rate lifts and how much will be returned to the farm gate is yet to be seen.
Some analysts are predicting early lamb prices of $6-$6.20/kg but only briefly, with values falling to an unsustainable $5.10-$5.25 in January 17.
With so much farm profitability dairy focused, the sheep sectors demise has gone under the radar, but if these levels do eventuate in a year where Beef and Lamb NZ predicts 700,000 fewer lambs, the financial pressures will shift to sheep farmers.
Many of the early lambing areas in the south and east of both islands are still dry but report good survival at lambing although are concerned how they will feed them.
Local trade prices are rising faster in the north than in the south, but average Canterbury saleyard values for prime lambs are now in the $123-$127 range.
WOOL
This week’s South Island wool sale was again weaker and vendors only sold 78% of the sale, in spite of offering some of the best pre lamb fleece of the season
The European buyers continue to dominate the sale and the lack of Chinese activity is a worrying trend.
Fine wools also eased back in price to now sit at Australian levels, although the offering of high tensile strength Merino wools, attracted good premiums.
BEEF
Beef schedules were stable again this week, as Rabobank predicts that US beef prices at retail will fall 22% this year.
Analysts suggest some readjustment of the manufacturing grades could occur on the back of easing US demand as processors look to recover profits after earlier margins looked thin.
Firstlight Foods have been promoting grass fed wagyu beef calves as an alternative option for beef farmers in the region to fill the gaps from reduced dairy support.
Store stock that is available is receiving strong demand with some young animals selling for more than $3/kg in southern saleyards, and early bobby calf sales seem to be well ahead of last year’s prices.
Local trade schedules in the north have now made $6/kg cwt are are 30c/kg ahead of the south as demand for quality animals builds.
DEER
More stable venison schedules again this week, as demand remains strong but farm gate returns are hampered by the strong Euro against the Kiwi.
Servicing existing programmes and new market initiatives are the focus of all processors as the industry realigns with a reducing supply due to a reinvestment into female breeding stock.
Chilled exports are growing with the shortages with Belgium being where the biggest volumes were sold but the Swiss pay the most per kg.
Velvet production is predicted to grow to 600 tonnes this year with China being the main destination of the product, although industry officials are hopeful the tariff concessions achieved via the NZ- Korea free trade deal will increase the competion between the purchasing countries.
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