Beef farmers in New Zealand are currently being weighed down by policies with many regulatory changes taking place such as the new freshwater policy. In the local beef market this week, prices of class A and class C remained relatively unchanged while weaner prices increased by 1.3% week on week. Cattle producers in South Africa are under pressure due to issues such as drought and decreasing profit margins. The trade directive issued by the Botswana government could result in a drop in local cattle and beef prices which would put farmers under added pressure.
Mutton: The international price of lambs increased marginally by 0.6% week on week while the price of ewes remained unchanged. New Zealand sheep producers can currently receive a higher return by selling ewes with twin lambs-at-foot (LAF) than they would receive by slaughtering the ewe and two lambs. This opportunity is short lived however as the market gets more volatile from here on in. In the local market this week the price for class A and class C increased by 1.5% and 4.5% respectively while the price for feeder lambs declined by 3% week on week. The current price of feeder lambs is 25.6% lower than prices were a year ago.
Pork: Majority of prices in the international pork market traded negatively this week with the US pork carcass price declining by 3.4%. Week on week prices of pork loins and ribs declined by 2.3% and 0.7% respectively while the ham price increased by 2.3%. Pork prices in the local market remained stable this week with the porker price increasing by a marginal 0.2%. Compared to a year ago, current prices for porkers and baconers are 6.7% and 8.9% higher.
Poultry: The international poultry market remained relatively unchanged this week. The price of US whole birds increased by a marginal 0.1% and the price of frozen MDM experienced a slight decrease of 0.3%. This week in the local poultry market the price for frozen whole birds increased by 0.6%, fresh whole bird prices decreased by 0.9% and the price of Individually Quick Frozen chicken pieces declined by 1.5%.
Hides: The current average hide price is R1.78/kg, this is 16.2% higher than last week’s price of R1.53/kg. This week prices were supported by the lower cattle slaughter numbers.
Majority of prices in the international beef market traded negatively this week. The price of topside, rump and striploin declined by 6.8%, 6.2% and 5.2% respectively week on week while the price of chuck increased by a marginal 0.6% and brisket prices remained unchanged. US beef market participants are paying close attention to the export data in order to gauge the level of demand for the final quarter of the year. Total beef export shipments in the week are 1.2% lower compared to last year. In the last four weeks, beef export shipments have averaged 7% below last years levels. Beef farmers in New Zealand are currently being negatively impacted by policies with many regulatory changes taking place such as the new freshwater policy. Farmers all over the world are continuing to work hard to improve environmental outcomes and to placate the general public. However, in the case of New Zealand, the general public they are having to appease are not the end consumer. Majority of New Zealand beef is sold on the export market – which are generally indifferent to the extra regulatory costs that NZ farmers are going to incur.
In the local beef market this week, prices of class A and class C remained relatively unchanged while weaner prices increased by 1.3% week on week. Cattle producers in South Africa are under pressure due to issues such as drought and decreasing profit margins. The trade directive issued by the Botswana government could result in a drop in local prices of cattle and beef which would put farmers under added pressure. According to the directive, 30% of Botswana’s national cattle herd is now earmarked for export and the Botswana Meat Corporation is in the process of increasing exports of stored meat to SA. This directive is a unilateral decision by Botswana in an effort to try and alleviate the plight of drought-stricken farmers in Botswana.
International beef prices are expected to continue their decline in the medium term due to continued pressure and political uncertainty. Local prices are expected to remain relatively stable however, prices may decline in the short term due to the Botswana directive. Prices are expected to pick up in November and December due to increased seasonal demand.
The international price of lambs increased marginally by 0.6% week on week while the price of ewes remained unchanged. The price of mutton ribs declined by 3.7% week on week while the price of mutton shoulders remained unchanged. New Zealand sheep producers can currently receive a higher return by selling ewes with twin lambs-at-foot (LAF) than they would receive by slaughtering the ewe and two lambs. This opportunity is short lived however as the market gets more volatile from here on in as the pool of sellers changes from farmers strategically targeting the market to those who are opportunistic or are pasture-poor.
In the local market this week the price for class A and class C increased by 1.5% and 4.5% respectively while the price for feeder lambs declined by 3% week on week. The current price of feeder lambs is 25.6% lower than prices were a year ago. The price for dorper skins and merino skins remained unchanged this week at a price of R25.83/skin and R38.57/skin respectively. Compared to a year ago the price of dorper skins is 25.13% lower and the price of merino skins is 58.93% lower.
Majority of prices in the international pork market traded negatively this week with the US pork carcass price declining by 3.4%. Week on week prices of pork loins and ribs declined by 2.3% and 0.7% respectively while the ham price increased by 2.3%. The import parity for pork ribs declined by 2.6% while the import parity of ham remained relatively stable with a marginal decline of 0.4% week on week.
Pork prices in the local market remained stable this week with the porker price increasing by a marginal 0.2%. Compared to a year ago, current prices for porkers and baconers are 6.7% and 8.9% higher respectively. Slaughter numbers were down for all livestock this week with the number of pigs slaughtered 9.8% less than last week. Despite this week on week decline in slaughter numbers the number of pigs slaughtered this week is 36.1% more compared to a year ago.
International pork prices are expected to remain under pressure due to the ongoing political uncertainty. Expected increases in the amount of pork imported by China due to the African Swine Fever outbreak would result in an increase in prices. Local prices are expected to follow an increasing trend for the medium term.
The international poultry market remained relatively unchanged this week. The price of US whole birds increased by a marginal 0.1% and the price of frozen MDM experienced a slight decrease of 0.3%. Compared to a year ago the price of whole birds and chicken breasts are 8.3% and 12.8% lower respectively. The price of leg quarters in the US declined by 1.4% while the price of EU leg quarters declined by 2.1% week on week. Compared to a year ago the price of leg quarters for the US and the EU are 11.5% and 10.6% higher respectively.
This week in the local poultry market the price for frozen whole birds increased by 0.6%, fresh whole bird prices decreased by 0.9% and the price of Individually Quick Frozen chicken pieces declined by 1.5%. The South African consumer is under pressure and is resistant to increased poultry prices which is limiting producers profit margins.
International poultry prices are expected to remain at these levels. The poultry industry is set to benefit from increased Chinese imports following the African Swine Fever outbreak. Locally, prices are expected pick up again from October. Local poultry prices follow the monthly demand trends and as such, prices are expected to be highest in the last week of the month. Prices are expected to increase over the Christmas period.
The current average hide price is R1.78/kg, this is 16.2% higher than last week’s price of R1.53/kg.
The current hide price is 64.9% lower than prices were a year ago. This week, prices were supported by the lower cattle slaughter numbers. Locally we did not see many fresh hides entering the market. Prices remain weak and a recovery is not be expected in the short to medium term.
