The Weekly Livestock Report

DAIRY

The summer weather is now getting more entrenched and most north island pasture production is now well behind last year, but in the south after a slow spring, summer grass covers are reasonable. Waikato has however been described as the "lucky region" with it catching just enough rain to keep production flowing satisfactorily but the dry is now starting to creep in. Southern silage contractors were active in December but more seedhead in pastures than is normal meant quality was lower.

Operators are being encouraged to empty effluent ponds during these dry months and be aware of ryegrass stagger outbreaks and the growing build up of facial eczema spores.

After another lift in commodity auction prices, and Fonterra stating movements in the Kiwi dollar will have a neutral affect on the payout, optimism is rising for a significant lift in projected income levels. National production totals for November show the country was 8% ahead in milk flows but drier summer conditions and a less likely wet autumn could see this figure fall significantly.

A large live animal shipment of rising two year old heifers destined for China will leave Timaru later this month amid animal welfare protests and concerns that these animals will be needed at home. Fonterra Shareholder units fell in value this week as a business analyst company reported they were overvalued and some expressed fears that at this rate "redemption risk" had returned.

Expansion plans by Harvard University’s Blue Sky Dairy investment in Central Otago has received no adverse publicity but real concerns are being expressed  about the two recent TB out breaks in Taranaki and Northland. Details of what Fonterra paid for NZ Dairies plant reveal they purchased it for under half its cost and if they can maintain the support of the suppliers this should be a profitable aquistion..

LAMB

Further falls in lamb schedules are driven by the softening of middle cut returns and the rising NZ dollar especially against our key European markets. An Easter focus sees more chilled product demand and this should help stimulate interest in heavier carcasses although Australian competition and US ranchers selling capital stock to survive is not helping an early turn around.

It has been reported that weak pricing has seen NZ using only 70% of its sheep meat quota into Europe as processors look to China to bolster prices of a product under pressure.

Poor clearances and pricing was seen in the annual stud ram sales as the market has squeezed optimism dry from breeders purchases. More onfarm store lamb sales have been selling well at the new levels but returns will savage farmers budgets and cause a tightening in farm spending.

WOOL

The second sale of the season saw demand driven by tight shipping schedules that saw good lifts in market indicators and nearly all the wool sold at auction. Mid micron wool levels rose to 885c, fine crossbred to 489, and coarse wools to 404c, levels not seen since early in the winter and with the quality of the wool showing it's normal summer deterioation, reflects stronger demand in the market place.

The first significant parcels of lambs wools also received strong support and the price indicator at 545c per kg was ahead of last years corresponding sale and will be a welcome addition to sheep farmers income.

Rabbit numbers are again increasing in the fine wool growing areas of the south island and will add unwanted increases in costs to control this resilient pest.

BEEF

Maybe the first signs of a revival from flat prices were seen in this week small schedule lifts. News from the US this week is that large beef processor Cargill is to close one of its big plants after giving up hope that the fall in cattle numbers that is now at a 60 year low will rebound, and NZ should look to fill this shortfall as the US economy revives. Hay stocks in this country are at the lowest level since 1957 and show any turn around is years away.

Cattle prices are plummeting in Australia on the back of flat prime prices and buyers are adjusting pricing at weaner sales accordingly.

DEER

Still more summer schedule falls this week as importers look to clear carryover chilled volumes from the traditional European consumption period. After earlier optimism on how well venison was handling the European crisis, summer schedules are now back to levels last seen in 2008 and will disappoint breeders hoping the fall in numbers was about to reverse.
Operators are now harvesting second cut velvet for the Chinese market and reports suggest pricing for most grades is between 5-10% ahead of last year and stable markets has seen sire stag sales maintain their respectable prices. Demand for animals with breeding values for venison showed the industry is coming of age and looking for the huge potential of growth rates genes to help finish chilled animals for spring marketing targets.