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The Sheep Deer and Cattle Report: Beef market goes off the boil but deer farmers worry the venison market will get overheated

Rural News
The Sheep Deer and Cattle Report: Beef market goes off the boil but deer farmers worry the venison market will get overheated

LAMB

Lamb schedules rose this week, as the Christmas chilled meat programs start in a still uncertain market, but helped by supply shortages and low stocks.

Good weather during most of the lambing period should have ensured excellent survival rates, but every lamb will be needed for any profits at prices suggested at the moment.

Feed conditons nationally are reasonable, too wet up north and too dry on the east coasts of both islands, but mild conditions have ensured reasonable early grass growth.

Many farmers have invested in speciality forages such as plantain and clover for lamb finishing, and these have enabled more animals to be finished earlier and heavier, and avoid having to sell store during that summer price low period. 

The Shanghai Maling Silver Fern Farms partnership received OIO approval, and with this last regulatory road block removed becomes unconditional, and the new company is due to start on the 4th January next year.

With farm confidence in the red meat sector falling, on the back of poor sheep meat and wool prices, this deal could be a game changer for sheep and beef operators.

Local trade schedules have been stable for weeks now but as the chilled Christmas export demand builds in a short supply market, price pressure could grow.

The Government and private businesses are to invest $31 million into growing the sheep milk industry, as a niche opportunity for intensive agriculture that is more sensitive to the environment than dairy cows.

 

WOOL
This week’s South Island wool auction was again weak and only 68% of the offering met vendors expectations.

Finer wools suffered the most, especially faulted merino and mid micron types, but coarser crossbred fibres bounced off the bottom in a flat sale.

NZ Merino has bought Silver Fern Farms share of the Silere Alpine Origin Merino meat brand, as they look to return the full benefits of this deal back to their shareholders.

They also report a profit from their wool trading as they now secure 70% of product by multi year contracts, and have declared a dividend to over 500 fine wool farmers.

 

BEEF
More beef schedule falls this week, as the US market remains very quiet and importers are looking to drive prices down to domestic levels.

Reports are emerging that parts of the US beef sector are at crisis level and some face bankruptcy, made worse by beef giant Brazil regaining access to that market.

The prime markets remain steady, and finished animals at the saleyards as yet have not been affected by traditional ‘spring fever” prices. 

However a 20c/kg fall in the north and 10c/kg in the south for local trade schedules could indicate shortages are over in the prime beef market, after an earlier kill in the autumn.

Prices for store stock are still ahead of prime as shortages and grass are driving the market, but after US reports about prospects for our lean beef markets some readjustments could soon come for our younger dairy beef animals that take two years to finish.

Broom gall moth has been successful in controlling this weed in Marlborough, and its introduction into Canterbury will be a welcome tool to control this weed, when sprays have proven uneconomic on lower productive land.

The spring bull sales have started with large numbers of yearling bulls offered to the dairy sector and most are reporting good clearances in the $2000-$4000/hd range as purchasers look to make their surplus bobby calves worth more.

 

DEER

Steady venison schedules this week, with many hoping these levels are the peak, as further price pressure could see a return to the boom bust cycle seen in the past.

All markets remain firm as the early animals are being harvested for very good money, and repay the long term commitment to farmers who stayed in the game through the tough times.

One processor reports a good lift in sales for the venison in NZ on the back of the tourist boom and local customers now educated to the qualities of this tender lean meat.

M2 Bull

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7 Comments

Shanghai Maling deal could boost farmer returns in short term, but will it provide a level playing feild for meat companies? i.e equal acess to Chinese markets?

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Of course it bloody won't, it has been done purely for control and control they will, why, because SM has it. This will be a real bite you on the bum deal in a few years time. Mind you, the farmers who are part of it today will likely have mostly sold to foreigners by then. I wouldn't mind betting that a good number of farmers who voted for it, had that very outcome in mind tbf.
I am pretty sure of one thing, it is very likely meat will be priced off my table, eventually, as other companies go to the wall, unable to compete with the vast sums of money available now to SFF to do just that. The whole lot will be heading for China, we will be importing some rubbish from elsewhere.

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US - China has announced it will lift its ban on US beef following a recently concluded review of the US supply system.
http://www.thecattlesite.com/news/50204/china-moves-to-reopen-market-to…

Brazilian Beef starts to enter the USA
http://www.beefcentral.com/trade/brazilian-beef-begins-to-trickle-into-…

Today’s Action
Cattle are trading lower today, $103-104 in Texas and Kansas, a new cash low for the year, and lower lows may still be in store. Talk is the kill could reach 610k this week, inflated by big cow kills. Pressure on the already weak lean complex will increase.
After years of live cattle futures carrying huge discounts to cash and locking limit down at the drop of a hat, it appears that cash and futures are trading places, with cash now under attack, while futures find trading par to slightly premium more to their liking.
http://www.thebeefread.com/

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Sleeping giant'

But prospects for beef demand could be stronger in the long term.

Earlier this week, Rabobank termed Russia the "sleeping giant" in the global beef trade.

"Until recently, Russia was a dominant player in the global beef trade complex," the bank said.

"Following geopolitical events, it decided to withdraw from global trade and focus on developing its domestic beef industry."

"This, however, has not yet generated volumes that overcome its beef deficit, and Russia remains a sleeping giant with the potential to re-enter the global beef trade, drawing in substantial import volumes in the process," said Rabobank.
http://www.agrimoney.com/news/russia-to-remain-sleeping-giant-of-global…

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Dairy farmers chasing trends are significantly changing bull values in NZ currently.
Where 2yr Jerseys were over $2,000 2 years ago when everyone was chasing tiny calves, now they are down around $1,600 due to substantially reduced demand as dairy farmers all rush to put beef bulls over their cows.
Lots of Jersey bulls are unsold in paddocks around the place which will hurt a lot of bull farmers.
On the other hand beef breeds like Angus, Hereford and Murray Gray are in huge demand, and any reasonable 2 year old is commanding well in excess of $2,000, and in some cases Herefords are approaching $3,000 a head.

Meat prices on offer here in the Waikato are still pretty strong at around $5.35/kg and the meat companies are saying they can't see prices falling much at all in the next few months at least, as they are really struggling to get enough cattle.

The prices for young beef stock have eased lately though, seems to be a consensus among farmers that we should expect to see lower beef prices in the future, as the international prices show.
Beefy type cattle should be cheaper again this time next year when the market is flooded by beef cross buls reared on dairy farms.

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What is most bearish is the talk in the country that some cattle feeders can’t move cattle. Bids are non-existent in some areas and pockets of unsold cattle are scattered, especially in the Midwest. Clean-up for the week is better than last week but inadequate and cattle will be carried over again. Discounts on heavy carcasses and YG 4s and 5s are becoming common. Carcass weights are well back of last year’s record level but are increasing seasonally, and will until November 1.Last year’s kill this week was 552k. This week we will kill 50k-60k more cattle than a year ago. Bigger production and cheaper beef prices have stimulated better domestic and export demand. With packer and retail margins record wide, history tells analysts the downside for fed cattle prices ought to be limited. Though that’s not at all how the market feels.
http://www.thebeefread.com/

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