The Sheep Deer and Cattle Report: Calf prices good for breeders but are they ahead of the market?

BEEF
Beef schedules were steady this week as the big cow kill continues, but demand is still strong for prime cuts.

The volume of cow product has dragged down imported beef prices in the US but an active herd retention is now underway in that country, and NZ producers should keep that in mind as they chase the beef boom in this country.

After an early start to the kill, processing figures on the 12th of March show the numbers are now well behind last year especially in the south, maybe reflecting some reinvestment in heifer stock and growing to heavier weights with the male crop.

Calf sales got into full swing in the Canterbury region and the returns followed northern values in the $3.50-$4.00/kg lwt area with some farmers receiving in excess of $200/hd above last year.

Prices are very strong for these youmg animals, well ahead on a per kg basis of  what they sold their adult animals for, so managers must be optimistic that the beef boom will last for another year or 18 months when these animals should be ready to harvest.

As has been shown in the dairy situation, agricultural commodities are cylical in nature and with feed grain cheap in many of the global beef producing countries and other proteins like pork and poultry much more competitive in price than present beef prices, an adjustment downwards will surely come at some stage.

LAMB

Still the big processors keep the lamb schedule at the bottom, as market prospects improve but only slowly.

Supply lines are predicted to tighten in May and hopefully the global market will respond to this, as sheep farmers are very disappointed about how this season has turned out.

South Island local trade prices fell again last week, but saleyard values of both prime and store lambs have lifted off the bottom as quality improves and supply tightens.

After shutting the Fairton plant early on as stock in Mid Canterbury had dried up, killing space is now at a premium with the other South Island plants  processing to capacity.

Processing volumes at 12 March were 1% ahead of last year for lamb  and very similar for mutton, but even though the kill was early and feed shortages affected much of the south, cumulative killing weights are now very similar.

Store lambs sold at the saleyards are now averaging $70 in the south and $80 in the north and at present schedules margins will be tight.

Ag Research has initiated a project looking to improve the fertility of hoggets as the importance of improving the returns from this area grows, especially while returns are low.

WOOL
The single South Island  auction saw prices lift on the back of better quality wools offered, and an easier currency on the day.

Coarse wool has averaged 579c/kg clean this season which is 57c ahead of last year, while lambs wool after starting very well, is now 47c/kg clean above last years sale average.

PGGW wool reveals they are selling more product via fixed contract than they did years ago, especially in the finer micron area, and this system now totals 12-15% of all wool brokered.

DEER

Another week of stable schedules as the industry starts it’s program to push summer eating of chilled venison in Europe.

If successful this will reduce the seasonality of prices and allow more production of chilled product later in the spring and early summer when grass is plentiful on most NZ farms.

To fund the P2P programme, which the summer eating of venison is the cornerstone goal, on falling deer numbers and an increasing retention of females, Deer Industry NZ has had to increase the levy on venison by 3c/kg CWT shared half between the producers and half by the processors.

Optimism is returning to deer breeding and demand for in calf hinds should be strong this spring and the reduction of females in the processing chain should keep supply tight and prices strong.