The Sheep Deer and Cattle Report: More farms start lambing but pessimism grows about pricing prospects for the new season


The lamb schedules lifted again this week, as the markets continued to firm but volatility in the NZD has been negative to farm gate returns.

With the tight supply most product has been sent to chilled markets helping maintain prices, but with demand in the UK easing recently, concerns remain how the market will react when NZ ‘s main production period starts.

Big losses have been recorded from the early lambing areas of the North Island, and concerns are being expressed where the Christmas chilled product will come from this year.

More North Island and southern flocks will be starting lambing now and every animal will be needed to improve the profits from sheep.

Demand for ewes at the point of lambing has been soft, with in lamb ewes looking good buying at $95/$100 a head in Canterbury, although at other saleyards animals with high scanning results have been selling for $30-$40 more.

Independent Meat Processors and Canterbury Fresh Lamb Ltd have gone broke owing $16 million, and reducing competition for prime stock in the Canterbury region.


This week’s South Island wool sale was weaker and vendors only sold 72% of the sale.

A quiet Chinese market and European holidays was blamed for the soft sale, although mid micron and finer wools did lift in value.

Fine crossbred wools are now 148c/kg behind the similar sale last year, and coarser wools just half that, but these lower returns coupled with disappointing meat prices will further dent sheep farmers confidence.



More stable beef schedules this week, as the US market stalls, but with low stocks on hand, at this stage it has had little effect on NZ’s market.

Analysts suggest big volumes of domestic product are anticipated to weigh heavily on the US market and this could influence demand for our future grinding product.

Rabobank reports that lower meat prices are predicted in the US with beef values estimated to drop 22% at retail this year.

This has had little affect on store stock pricing as yet, but buyers should be aware there could be some readjustment soon if overseas market signals flow through.

Silver Fern Farms has won the prestigious most trusted brand award for meat in NZ and are satisfied this vindicates their marketing strategy for meat products



Another week of stable venison schedules, as Deer Industry NZ launches a new deer farming training course to upskill new entrants and workers, to grow the sector in the future.

Venison exports fall to Germany and importers warn that prices are too high, and unreliable year around supply could risk restaurateurs taking the product off the menu.

And competition builds as Scotland plans to expand it’s deer farming industry, amid strong British demand and profitable returns from the existing participants.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a 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.


The US beef market is as far as I know the best paying market and it's swamped with beef.

Another 595-600k kill is in the works on the heels of last week’s 599k. YTD beef production is up 4.5%. The industry has killed hundreds of thousands more fed cattle this year than last year at lighter carcass weights. Predictions for this week’s cash cattle trade are already $1-2 lower following last week’s weak to lower market.The most interesting aspect of last Friday’s USDA Cattle-on-Feed report was the confirmation of a shift underway. Large corporate feedyards in Texas, Kansas and Colorado continue to place cattle more aggressively and consistently than the yards in the north. With access to capital, these yards appear willing to accept a very small return in order to generate yardage and fulfill commitments, now that cheap feed availability is ample. Kansas placements were up 13% and on feed up 9%, Texas up 4% and on feed up 3% and Colorado up 28% on feed up 3%. Nebraska’s has 5% fewer cattle on feed than in 2015. The squeeze related to equity constraints appears to be having a direct impact on the small to medium-sized, independent feeder.

It's called a crash

Here by Xmas ?
How do we hedge ?

Heres what a crash looks like

CME live cattle futures are now very oversold, though the news continues to be bearish and bottom pickers are scarce. Given the outlook for this week, there seems to be no reason for a rally. Yesterday’s nice rally after holding above the gap faded by the close and today’s action confirms yesterday’s rally was nothing but a short-term correction.
This week’s kill could rival the largest kill of the year and clock in at 605k, giving credence to the prediction of $3-5 lower on the choice cutout by Friday. Again, Q3 ought to be every bit as lucrative for the packer as Q2, the silver lining to this bear market’s dark cloud—at least some degree of currentness in fed cattle marketings is being maintained or even gained.
It was clear in yesterday’s USDA Comprehensive Boxed Beef report that sales volume has slowed dramatically as of late and it may be post-Labor Day before another shot of brisk sales activity comes into play. In the mean-time it’s a bit of a slog, not unusual for this time of year.
Cash bids have surfaced today around cattle feeding country at $115, $2 lower than a week ago and have been passed. There’s a rumor of small trade in Iowa at that price level that hasn’t been confirmed. It is not new news that lower cash trade is anticipated this week as another +100k negotiated trade kept packers in decent shape, even with big kills. Still, black margins and big kills do keep the packer in the market weekly, which is paramount.
With only 6 trading days left for expiring Aug, Oct coming on $5 below the 2016 cash low may make the Oct vulnerable for a rally in its oversold state. But today, what looks cheap is not being viewed as worth owning. And plenty of bears are betting on a new cash low being made short-term, despite expectations of tighter supplies just around the corner.