DEER
Stable schedules again this week as exporter report low supply from farmers in February that could see the season’s production back by 6-8%.
The buyers have responded to this by forward purchasing a large percentage of the crop and this should ensure future stable pricing with only the currency to interfere.
Weaner sales are starting at levels well ahead of last year as the breeders finally achieve sustainable profits from this enterprise with good young stags selling in the south for $4.50/kg lwt and smaller ones for $3.80/kg lwt.
Pre mating well bred hinds were traded for $450/hd with a $50 premium more for strong velvet genetics, and one agent believes IC hinds may reach $600/hd into the winter.
LAMB
Another week of subdued schedules, but some exporters report that demand and prices are lifting with promising signs for early UK’s Easter sales.
The market is becoming aware that NZ’s production this year could quickly slow in May/June and some increase in interest is expected soon, on the back of this.
Late February processing statistics show the mutton kill is nearly 16% ahead of last year and the lamb kill 1.5% ahead reinforcing the idea that soon stock will run out and some chains have closed in response to this.
The dry autumn has affected many eastern areas of NZ and combined with poor pricing has encouraged early processing, although average per head weight (17.95kg 20-Feb) are still similar to last year despite the challenging climate.
Farm returns for lamb are 14% below and mutton 40% behind (in the south) the five year average, reports one processor which illustrates the problems with the sheep sector.
Prime and store lamb eased at southern saleyards last week, and it now takes a huge lamb to make a $100 at these venues.
Most ewes appear to be in good condition as they go to the ram, as years of vigorous culling has lowered the stocking rate and improved the quality of the breeding flock.
Next month is the deadline for OIO approval for the Shanghai Mayling deal, and if it goes ahead the new company could be operational by May and ready to start on achieving all the advantages the proposers sold to NZ shareholders, in what today is a much weaker market for sheep meats than a year ago.
WOOL
The double island sale saw prices lift for finer crossbred and ease for coarser wool indicators, but coarser lambs wool is now fallen back to levels of last year, as supply has surpassed demand.
Meat exporters report they are now receiving more shorn lambs and wool returns have dropped for this shorter fibre.
Landcare Research has announced it hopes to release a new rabbit control virus in the autumn of next year after Australian trials showed it could achieve a 25-30% kill to ever growing numbers.
Scientists say it will not be as effective as the earlier strain but will take out much of the population now immune to the original release, and in association with traditional methods of control will help keep rabbit numbers in check.
BEEF
The cow kill period is about to start, and with this increased supply US importers have brought prices down and with it cow schedules eased back.
Big numbers are again being sold through the saleyards and this week at Temuka values dropped significantly for all weight ranges.
Prime schedules are steady but prime cuts have lifted slightly after a period of increased interest from China and Korea, and saleyard prime steer prices are falling but are still 30c/kg lwt ahead of similar sales a year ago.
Canterbury weaner beef sales start this week as breeders will be keen to unload after the dry conditions have reduced feed supplies in the hill country, although recent rains should be ideal to rebuild feed covers before winter.
North Island weaner beef sales continue their spectacular run with the Te Kuiti sale similar to early prices and sure to please breeders who sold.
New entrants buying beef weaner calves may find they will need good cashflow as in many North Island sales animals sold for $900-$1000/head and some will need nearly two years before they can sell them prime.
Processors do report however they believe beef has sound medium term prospects, and point to Australia predicting 15% less animals for sale next year due to years of drought in the northern states, helpful for NZ producers.
M2 Bull
Select chart tabs
19 Comments
Record losses for 100 day grain fed trading budget; is there a train wreck looming?
http://www.beefcentral.com/lotfeeding/record-losses-for-100-day-grainfe…
Not sure about trainwreck Aj but definitely some very skinny margins in the offing.
There is a pretty extraordinary set of circumstances presently at play down here. There is a large number of dairy grazers who have lost their contracts sitting on heavy feed crops that are looking for alternative stock. Add to that sheep farmers who are genuinely disillusioned with the sheep job wanting to get into the beef job. Throw in the fact that there just isn't the calves around that there used to be and bingo, its all on for young and old!
I breed and finish my own but it is hard to justify farming them on at these sort of prices, however I have the feed so I also need the mouths. It seems to me like a smaller scale version of the dairy thing where the warning signs are there but no one is really looking at the moment hoping they will get one more trade in before the music stops.
Shaggers, I'm thinking about selling some cattle and having an easy winter. Prices are crazy across all classes of livestock, but the warning signs are up.
http://www.agribusiness-insight.com/industry-trend-analysis-us-meat-ret…
http://www.beefcentral.com/trade/sharp-turnaround-in-us-imported-beef-m…
https://secure.attenbabler.com/wordpress/wp-content/uploads/2016/03/US-…
On the Horizon
In the first half of 2016 protein exports are expected to remain somewhat of a challenge.
“But conditions are predicted to improve over depressed 2015 levels due to a variety of economic factors,” Amen said.
Meanwhile, imports of lean beef should slow significantly and domestic consumer demand for beef, pork and poultry is anticipated to remain strong and supportive of prices. Supply imbalances have already begun the correction phase, with supply and demand expected to achieve equilibrium by about mid-year. The strength of consumer demand going forward will impact how much and how soon U.S. meat prices change.
http://www.agriview.com/briefs/livestock/cobank-predicts-easing-of-u-s-…
I am often wrong and images in the mirror can be further away than they appear. I take all care but no responsibility.
The combined North American cattle inventory on January 1 thus is estimated at 120.4 MM head, 2.2 million head (+1.9 per cent) higher than a year ago but still 13.8 million head (-10.3 per cent) from what it was in 2005.
Now consider the January 1 inventories in Brazil, Argentina and Uruguay. These are the equivalent of our July inventories but we are looking at the trend here. According to USDA, their combined inventory as of January 1 was 283.2 million head, 6.5 million head (+2.4 per cent from a year ago). Since 2005, their inventory has increased by 47.3 million head (+20 per cent). If we were to also add the Indian buffalo growth, the numbers become staggering. And ultimately that is what is driving the retreat in global beef prices.
http://www.thebeefsite.com/news/49388/cme-us-cattle-numbers-continue-to…
http://www.thebeefsite.com/news/49418/brazil-us-negotiate-further-marke…
The second story may interest you too.
http://qz.com/643433/all-you-wanted-to-know-about-cows-in-india-in-char…
There are are some very suspicious looking rouge weeds in a neighbours fodderbeet. Looks like someone will have some explaining to do. At this stage mine seems clear.
One thing I like about beef is that as an internationally traded commodity it is much easier to read the tealeaves than it is for sheepmeat, which is traded behind closed doors in smoke filled rooms. The Indian buffalo thing is not always well understood as a market dynamic.Thanks again for the links.
Velvetleaf reproduces from seed. A single large plant can produce up to 8,000 seeds. Seeds dropped by the parent plant are dormant at least until the following spring, but under certain conditions can remain dormant for up to sixty years. The long period of seed dormancy is primarily due to a hard seed coat.
Velvetleaf is also difficult to control because from late evening until early morning its leaves go through a sleep cycle in which they droop to a nearly vertical position. Drooping leaves catch less herbicide than do horizontal ones. Therefore, the most effective way to control velvetleaf with herbicides is to spray during the day when leaves are more nearly horizontal.
For example, if velvetleaf and soybeans emerge at the same time, early in the season (mid-May), one velvetleaf plant per 12 inches (30 cm) of row can reduce yields 25 percent.
http://www.waikatoregion.govt.nz/velvetleaf/
Why are we importing seeds? so some company can make a few extra bucks on the arbitrage while the taxpayer picks up the risk.
Don't go saying "Rubbish" to me without checking on the requirements to bring any seed into the country Steven.....there is a bureaucracy who is tasked with biosecurity.....so looks like they weren't doing the job they were paid to do....so what happens now......under urgency the people who were deemed responsible for keeping things out need more powers and increased numbers to go about some expensive eradication strategy using a cocktail of another bureaucracy mandated chemicals to kill off the crap they let in in the first place........these actions are typical public servants actions and there is no damn accountability.....they squeal they are over-worked and always demanding bigger budgets.......it is very much in their best interests to have a continual round of problems to address..... it is certainly not in any farmers best interest to have more and more costs and regulation!!
There are lots oh rumours to that effect down here to.The SM share price has taken a significant correction and they have let a European subsidiary go under. There are also some rumours that there could be more shareholder action in regard challenging the process. Could be a wee twist in the tail yet.
Talking to my accountant he said his beef clients had one of their best financial years to March/May 2015 but having now replaced at current store prices lot of wind taken out of their sails.
Aj - I too have taken the money on 18mth cattle and will now sit here and watch the grass grow over the troughs - wont know until August if its the right decision but know local processor is pushing down hard on beef schedule.
Crazy to be this good when there are soo many cattle in the world, isn't it hard swimming against the current.
http://www.thebeefsite.com/news/49388/cme-us-cattle-numbers-continue-to…
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.