Weekly Agridata report: Chinese demand for velvet; beef and lamb prices firming

interest.co.nz has a sister on-line publication agridata.co.nz which follows rural issues of interest to working farmers. We are working to draw the two services closer together, and this project will be launched later in the year. In the meantime, here is Agridata's latest weekly review of farm-gate prices and price influencers. Deer The velvet market is in an awkward dilemma with Chinese demand unsatisfied for regrowth, spiker and manufacturing grades, but they show little interest in NZ's heavier sticks. To survive farmers have lifted stick weights substantially, and now a large portion of production is in the A and super grades. Korea is the main market for these, and with recent demand flat, producers are having to be patient as the product is steadily sold, in a bid to maintain price, and build long term business.

With the small number of deer being killed, and the frozen market reported to be slow because of lower priced competing proteins, exporters report that some of the schedule price is procurement driven. Processing numbers are back 22%, and plant efficency is an issue as companies strive to be profitable, and yet still reflect a sustainable price in the schedule. Industry growth forecasts show it will be a few years yet before numbers return to previous levels. The latest deer schedule prices are here >> Beef Prices are still firming in the US under the familiar themes of strong domestic values and tight imported supplies (Australian imports are down 43% compared to a year ago). Strong US grinding beef prices are seen in our bull beef schedule which is now only a couple of cents from the yearly high, and has lifted a massive 65c/kg from the spring lows. Those bull producers that had feed and decided to put on weight to compensate for the poor spring schedule will be pleased with how prices have lifted. The prime schedule is more subdued but also has recovered well from the "˜recession blues'. Saleyard and local trade prime steers have been tracking slightly ahead of export schedules, with South Island prices lower than in the north. You can find the latest beef price reports and trends here >> Lamb Lamb schedules remained firm in the north, but steady in the south, as the supply shortages have held processing back by about 15% on last year. The summer weather has arrived late in many areas and from March the lamb flow will readjust quickly. Store lamb prices continue to surprise by their strength, with some farmers obviously very optimistic about the schedule rising in the late autumn and winter. Compared to last year prime lamb schedules are $7-8 behind, but many store lamb prices are similar. Mutton prices are quite strong for this time of year, reflecting both a lack of supply due to the dairy expansion and previous droughts, and an earlier kill for many cull ewes. The latest lamb schedule prices are here >> Wool The wool market eased again, as farmers excited by better values, offered 28% more wool than was rostered, and with a shortage of shipping capacity, supply exceeded demand, and values dropped. The weaker currency minimised the drop but this sale showed that the recent lift in prices could be flaky unless well managed. You can find the latest wool price reports and trends here >> Dairy World dairy prices continued to trade downwards but fortunately European prices are still well above levels that would result in product going into storage. A rationalisation of UK dairy interests is being investigated as their small dairy companies struggle against larger global competitors. NZ producers that decided many years ago to form Fonterra will relate to the UK position, and be comforted by the global position that company is now in. With another small dairy processor gaining consents to operate in the south this week lets hope the industry is not reinventing the wheel, with too many small companies competing for milk. For more detailed news and information about rural issues, and animal and feed prices, visit www.agridata.co.nz