Producers are hopeful that in the US/China trade negotiations China will commit to buying more beef from the US thereby increasing beef prices. The surge in pork prices will provide underlying support to beef prices in the short term.
The average week-on-week increase in beef prices for all grades was 2.1%; only C prices declined. South Africa is yet to fully regain their FMD-free status, although prices are recovering nicely. Prices are expected to be supported at this time by the approach of Easter as well as by the weakening Rand. Weaner calf prices are 14.3% lower than they were last year.
It is expected that class A beef prices will follow a similar trend to 2017. In April prices will stabilize before dropping in June. At this time class C prices will start to increase as more consumers purchase stewing meats for the winter season. Feedlot margins may improve as yellow maize prices are expected to decline in April.
Beef: Feedlot margins are expected to increase due to declining yellow maize prices. Class A beef prices are expected to stabilize in April before declining in June when Class C prices will begin to increase due to higher demand in winter.
The New Zealand sheep meat market generally had a positive week with lamb and ewe prices as well as import parities increasing week-on-week. The prices of specific cuts, mutton ribs and mutton shoulders, declined week-on-week. The current price of mutton shoulders is the same as it was a year ago, the price of ribs is 2.7% higher than it was a year ago. Year-on-year only New Zealand lamb prices declined. A study conducted by IBISWorld has shown that the increased demand for vegan products is threatening the New Zealand meat and dairy industries.
As Easter approaches Class A prices were the only prices that increased week-on-week. All classes of sheep meat as well as feeder lamb prices declined year-on-year. The number of animals slaughtered across all classes increased by 12.4% week-onweek. The New Zealand sheep meat market generally had a positive week with lamb and ewe prices as well as import parities increasing week-on-week. The prices of specific cuts, mutton ribs and mutton shoulders, declined week-on-week. The current price of mutton shoulders is the same as it was a year ago, the price of ribs is 2.7% higher than it was a year ago. Year-on-year only New Zealand lamb prices declined. A study conducted by IBISWorld has shown that the increased demand for vegan products is threatening the New Zealand meat and dairy industries. Sheep meat prices are expected to increase in April as Easter approaches, this is in line with seasonal trends. Prices will stabilize in May before experiencing another increase in June due to increased consumer demand during the winter season in South Africa.
Mutton: Class A prices increased week-on-week by 1.4%. Class C and feeder lamb prices declined week-on-week. All prices are lower year-on-year. The number of animals slaughtered is 12.4% higher than it was last week. Prices are expected to increase in April for Easter.
China has lost between 15-40% of their production due to a Swine Fever outbreak, it is expected that China will have to import large volumes of
pork over the next year. If China were to get 25% of their imports from the US, they would need to import 257 million pounds of pork per month, this would have a massive impact on pork prices. Pork prices have surged due to this but large volatility is expected over the next few months.
US pork prices across all cuts increases week-on-week. Year-on-year only US rib prices declined while US ham prices had the largest increase
of 34.9%. Import parity prices of ribs and ham both increased week-on-week.
Unlike the international market, overall the local pork market was more negative than a week ago. Prices of porkers, bacons and the contract
average declined. The number of animals slaughtered across all classes declined by 6.9% week-on-week although it is 29.7% higher than it
was a year ago. The price of baconers have seen a 8.2% increase since last year.
Prices in 2018 are not expected to follow the same trend as seen in 2017. Prices are expected to trade slightly lower in the next 3 months
before picking up in June in line with seasonal trends.
Pork: Swine Fever outbreak in China has resulted in a loss of production of 15-40%. Due to this Chinese imports are expected to increase which will support pork prices world-wide. Large volatility is expected in the international pork market in the next few months which will impact the local market. Locally pork prices declined week-on-week despite the positive movements in the international market.
A Bird Flu outbreak was reported in Bulgaria on the 3rd of April 2019. The virus was discovered on a duck farm; a 3km protection zone has
been set around the farm. The National Farmer's Union in the US are urging President Donald Trump not to close the US-Mexican border as
they feel it would be disastrous to the US agriculture industry.
South African poultry prices increased slightly this week however year-on-year prices have decreased by between 4.5% and 7.7%. The import
parity of whole birds and breasts has also declined week-on-week but is higher than prices a year ago. The bird flu outbreak in Bulgaria may
support South African poultry prices in the next weeks.
Prices for whole fresh and whole frozen chickens are expected to increase in April before declining in May to a low. Prices are expected to
increase again in July. Prices for Individually Quick Frozen chicken is expected to bounce up in April in accordance with seasonal trends.
Poultry: A bird flu outbreak was reported in Bulgaria which may support local poultry prices. Week-on-week prices have increased slightly however are lower year-on-year. Prices of fresh and frozen birds are expected to increase in April while prices of IQF are expected to bounce sharply in April.
Wessel Lemmer & Paige Bowen
