Beef;The weakening Rand will provide underlying support as RSA exports to certain destinations recover. Given stable maize prices and a recovery in beef carcass prices, feedlot margins may improve supporting the recovery of weaner calf prices during April.
Mutton: For the week ending 22 March Class A prices decreased week on week by 3,5%. Class A prices are 4,4% lower than a year ago and feeder lamb prices 7,7% lower than a year ago. In line with seasonality prices are expected to increase from April onwards.
Pork: USA pork carcass prices increased week on week by 10.7% and 3.5% year on year. A massive increase in pork exports to China are expected as the production of pork is between 15% to 30% down. China need to import 10% more of what they used to do
Poultry: US poultry prices increased week on week across all categories. Global trade conditions are expected to gradually improve in 2019. China is expected to face a protein shortage this year with poultry as the major substitute. Changing global trade access will drive volatility in the 2019 market.
Beef market trends
Cold winter weather limits beef production in the northern hemisphere
The US feeder cattle market is more stable the past week with prices being higher supported by the increase in hog prices. During spring the production of beef will increase significantly and traders in the US expect hefty numbers if weather conditions improve. Easter is approaching and it is expected that beef prices will enjoy underlying support during April.
Local beef prices to be support by Easter until May
The average price across all grades except Class C increased week on week by 1,1%. It is expected that the prices of weaner calves will follow the price trends in 2017 until June. The production of maize is similar to the previous CEC production forecast. The weakening Rand will provide underlying support as RSA exports to certain destinations recover. Given stable maize prices and a recovery in beef carcass prices, feedlot margins may improve supporting the recovery of weaner calf prices during April.
Sheep meat market trends
New Zealand export values are higher than last year.
The average export value for NZ lamb was 6,2% higher in February year on year. Even though Easter was two years earlier last year the February's prices for bone-in lamb cuts is also ahead of last year's prices. New Zealand lamb prices traded higher for the past week but is still 3,2% lower year on year. Import parity prices or NZ lamb and ewe are higher year on year.
Local mutton prices to bottom out during March
For the week ending 1 March Class A prices decreased week on week by 3,5%. Class A prices are 4,4% lower than a year ago and feeder lamb prices 7,7% lower than a year ago. In line with seasonality prices are expected to increase from April onwards.
Easter and a weakening Rand will support local prices during April
In line with seasonal trends it can be expected that Class A and Class C prices will start to increase during Easter. The weakening Rand will provide underlying support for imported shoulder and rib prices.
Pork market trends
China pork imports to increase by 10%
USA pork carcass prices increased week on week by 10.7% and 3.5% year on year. A massive increase in pork exports to China are expected as the production of pork is between15% to 30% down. China needs to import 10% more of what they used to do. US monthly exports may increase by 257 million pounds (116 000 ton) per month. In the past month US pork carcass prices increased by 17%. It can potentially increase further by 12%.
Expect local prices to be underpinned by global pork prices from July onwards
Slaughter numbers are week on week -8,2 % lower compared to the 36% increase in slaughter numbers year on year. The contract average price is 1,6% lower than a year ago. Despite the year on year increase in supply prices remain firm on strong local demand. Seasonal trends indicate that prices used to bottom out by April to increase from June onwards. However, local prices will be underpinned by significantly higher global prices due to an increase in imports by China.
The profitability of local pork production will recover in the latter part of 2019
The profitability of pork production will be under pressure from April to June due to increased animal feed prices. However, the expected increase in global pork prices together with a weakening Rand will underpin pork production incomes during the latter part of 2019. Local prices are expected to strengthen despite seasonal trends indicating lower prices.
Poultry market trends
Global trade in poultry to increase in 2019
US poultry prices increased week on week across all categories. Global trade conditions are expected to gradually improve in 2019. China is expected to face a protein shortage this year with poultry as the major substitute. Changing global trade access will drive volatility in the 2019 market. A potential US-Chinese trade agreement may re-open the Chinese market or US chicken exports. Mexico wants to impose safeguards on US imports and South Africa on imports from Brazil.
Global poultry prices increase while local prices decline
Prices of local frozen whole bird declined week on week by 3,7% and is respectively 5,4% and 5,1% lower than a year ago. The price of individually quick frozen poultry is 9,6% lower than a year ago. The higher year on year maize prices impacts negatively on margins. Prices of US poultry products increased week on week driven by higher pork prices and an expected increase in imports by China.
Prices of locally produced fresh fillet products to increase over Easter
The prices of imported individually quick frozen products seasonal will increase during April. The prices of local fillet products may increase from R32/kg to R38/kg as the supply of imported products do not meet local demand.
