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The Weekly Livestock report: Velvet prices firm but venison easing; dairy prices rise in US$; lamb prices fall in NZ$; beef prices are flat

Posted in Rural News

DEER

Some small carryover of chilled volumes after the Xmas promotion in a weak European market continues to make importers cautious and weaken schedule values.

Frozen product values are readjusting downwards relative to other game and red meats and producers focus should now be on doing the job better rather than increasing volumes into a hesitant market.

Schedules are now close to summer lows but are 135c/kg below last year and the lower average finishing price for those that struggled with slow spring feed conditions and failed to achieve growth rates for the chilled market will be expensive for a few.

The sire stag sales saw very good clearances of specialist venison animals with venison breeding values and purchasers paid nearly $3500 per head for genes to achieve the industrys " heavier/earlier goals". Three venison plants have been approved to export to China although many regulatory hurdles still exist, but finishers will be keen to see this market expand and reduce the reliance on seasonal European markets.

The velvet production season has now moved past the first cut stage and embarking on harvesting regrowth for the strong Chinese markets. The fixed price contract that set the tone for early price indications has been supported by the market and sales have consistently priced at $100 net to the farmer for first cut velvet. Grade prices published, (now very hard to source) reveal sales of SA at $128/kg gross and spiker velvet traded in the $110-$145/kg range and overall sellers report market lifts of 5-10% above last year.

The market in January is described as quiet but with a big percentage of the early product sold and a will by most traders to manage the balance to protect those early sales marketers are satisfied the season is on track for another stable sustainable season.Industry volumes are predicted to remain steady at around 450 tonnes green and with many of our overseas competitors producing less the NZ industry is well placed for future years.

The national velvet competition once again showcased the progress breeders are making on improving velvet production and style genes and the fact that price and volumes are stable and sustainable is testament to the good work done in the genetics area.

The stag sales are nearly over for another year and animals sold with breeding, trophy and velvet genes sold well with nearly a 80% clearance of deer sold averaging $5836 each.

These sold with a premium of nearly $2500 on animals with only venison BV's and shows velvet farmers confidence in investing in this product for the future.

DAIRY

The mix of hot dry days with some summer rain continues, which has generated good feed in many areas of the country, and importantly the major production regions of Waikato, Taranaki, Canterbury and Southland are all performing well with milk flows.

The latest global dairy trade auction saw prices firm again with the index increasing by 1.1% and whole milk powders leading the way rising by 2.8%. But with the currency now at 84 USc, the returns in NZ$ fell.

Record whole milk powder exports have been reported for November, with China accounting for nearly half these volumes and emphasizing it’s importance in NZ’s export trade.

No better reflection of NZ’s change in land use was seen  in the sharemarkets benchmark 50 index where the Fonterra shareholders fund will tip wool firm Cavalier Corp out, as milk replaces fibre as the product with the best future and profit.

Another trend highlighted this week is the growing numbers of migrant workers employed in the dairy industry as many young New Zealader’s opt for jobs with shorter hours in the cities.

It is also been reported that robotic milking systems have attracted growing interest as farmers look to technology to replace the drudgery of twice daily milking.

LAMB

Things continue to be grim on lamb pricing with the average $90 lamb promised by industry chiefs now in the low $80’s, and with dryland eastern areas parched in both islands farmers have no option but harvest and sell.

The marketing focus quickly turns to Easter promotions as every milestone is under pressure to perform well and lift confidence in the sheep sector.

The first of the annual store ewe sales started in Gisborne where 15,000 mixed aged ewes averaged $106 and in the Hawkes Bay 2ths averaging $119, levels that would disappoint vendors but reflective of current returns for sheep.

A big yarding of 22,000 store lambs in Feilding tested the market but agents reported prices held up well with feed in just enough north island areas to maintain demand.

WOOL

The new year saw the combined sale of nearly 22,000 bales attract firmer bidding and the crossbred indicators lifted by 3-10 cents which was seen as a good result as summer colouring is affecting fleece quality.

China now buys 45% of wool exported out of NZ and our reliance on this trading partner is crucial for this countries economic well being.

The takeover offer by Australian wool merchant Lempriere for NZ Wool Services is nearly complete with the announcement they have secured 87% of the shares, a move that will ensure competition in the wool scouring business.

BEEF

Still processors promise better prices for beef in the autumn but the US market remains flat and prices are trading in a narrow range.

It is interesting to note in Australia the first of the weaners sales have started and prices are well back with vendors citing lower than expected prime prices as the reason for caution in pricing.

Prime steer prices have remain flat in the saleyards in NZ since October and finishers will be hoping weaner steer prices will reflect this weaker market when they need to replace these animals in the autumn as well.

Reductions in duty rates for beef have made the Chinese market more attractive than Korea and Japan and volumes are growing into that country.

Northland has had a TB outbreak in some of its cattle herds and this reminds farmers of the importance of regular testing and vector control if our low incidence status is to be maintained.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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