Beef market trends
International beef market
Prices in the international beef market were mostly negative this week. The price of topside, striploin, chuck and brisket declined by 4.7%, 9.6%, 4% and 1.5% respectively week on week. Chicken is starting to become the American's favourite meat choice and because of the beef prices are declining. The USDA cut its outlook for beef consumption last month and now projects that demand for beef will stay stagnant for this year.
Local beef market
In the local beef market this week, prices of class A and class C remained fairly stable week on week. Cattle producers in South Africa are under pressure due to issues such as drought and decreasing profit margins. The local beef market remains quiet with little movement. The consumer spending power is simply under strain and the lack of demand is placing prices under pressure. The weaner calf price got support this week from lower supplies and increased demand. The industry will monitor the impact of the opening of live cattle exports from Botswana and Namibia.
Outlook
International beef prices are expected to continue their decline in the medium term due to continued competition for other protein sources and political uncertainty. Local prices are expected to remain relatively stable due to consumer spending constraints. Prices are expected to pick up in November and December due to increased seasonal demand.
Sheep meat market trends
International sheep meat market
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 increased by 3.4% week on week while the price of mutton shoulders remained unchanged. New Zealand lamb supply is low at this time of the season. Both international prices and the farm gate prices farmers are receiving for stock are at high levels. China's demand for other meat is supporting meat prices. UK retailers will be anxious to secure New Zealand lamb and mutton products for the Christmas period. The Chinese buyers remain eager for New Zealand lamb products, especially lamb breasts that is pushing prices above the US$8/kg.
Local sheep meat market
In the local market this week the price for class A and class C decreased by 4% and 4.1% respectively while the price for feeder lambs increased by 0.5% week on week. The current price of feeder lambs is 23.9% lower than prices were a year ago. The price for dorper skins declined by 6.7% from R25.00/skin to R23.33/skin and merino skins increased by 10.7% from R35.50/skin to R39.29/skin this week. Compared to a year ago the price of dorper skins is 37.5% lower and the price of merino skins is 58.88% lower. Constrained consumer spending power has capped any increases in the lamb and mutton market. It is difficult for the lamb and mutton prices to compete with cheaper protein alternatives in the local meat market.
Outlook
International prices are expected to stay in the higher range in the medium term, supported by growing demand by the UK market in preparation for the Christmas season. Local prices are expected to experience some increases from November due to increased seasonal demand, however this year, that increase will be capped by the lower spending power consumers are facing.
Pork market trends
International pork market
The majority of prices in the international pork market traded positively this week with the US pork carcass price increasing by 4.5%. Week on week prices of ribs and ham increased by 1.8% and 3.7% respectively. The import parity for pork ribs increased by 3.5% and the import parity of ham increased by 4.7% week on week. China has just announced that they will ease back on restrictions on US pork and soybean exports, providing some relief of the pressure from new tariff regulations. Given that the US is the world's second largest pork producer, they are a logical supplier to fill the supply gap in China, that is assuming that trade negotiations can be agreed upon.
Local pork market
Pork prices traded mixed this week with the porker price increasing marginally by 0.3% and baconer price declining by 0.4%. Compared to a year ago, current prices for porkers and baconers are 0.9% and 2.3% higher respectively. Prices in the pork market have been trading flat for the past month. Producers were expecting the market to pick up in September due to warmer weather sparking more braai-ing trends however, that was not the case. The market is now starting to show small gains in October driven by a pick-up in demand. The factory prices are not expected to pick up significantly due to consumer resistance, everyone is feeling the pinch. The industry remains hopeful for better consumption into the summer period and growing demand because pork is a cheaper protein alternative.
Outlook
There's hope for Chinese buying amid renewed high-level trade talks to be held October. This supported prices in the short term. Local prices are expected to follow an increasing trend for the medium term. Consumers are expected to increase their meat consumption during this summer period until the Christmas period.
Poultry market trends
International poultry market
The international poultry market traded mostly positive this week. The price of US whole birds increased by 2% while the price of fresh MDM and frozen MDM increased by 1.2% and 0.4% respectively. Compared to a year ago the price of US whole birds and US chicken breasts are 5% and 19.5% lower respectively. The price of leg quarters in the US decreased by 8.5% and the price of EU leg quarters decreased by 3.5% week on week. Compared to a year ago, the price of leg quarters for the US and the EU are 6.3% and 4.2% higher respectively.
Local poultry market
This week local poultry prices remained unchanged. The South African consumer remains under pressure and is resistant to increased poultry prices which is limiting producer's profit margins. The upturn in demand from month-end is supporting sales volumes.
Outlook
International poultry prices are expected to remain at current levels. The sustained demand for poultry from China continues to support international poultry prices. Locally, prices are expected to trade slightly up due to an increase in demand. According to consumer trends, meat consumption increases during this period. Prices are expected to increase over the summer period and Christmas season.
Hide market trends
Local hide market
The current average hide price is R1.78/kg, this is 0.6% lower than last week's price of R1.79/kg.
Outlook
The current average hide price is R1.78/kg, this is 0.6% lower than last week's price of R1.79/kg. The current hide price is 65.3% lower than prices were a year ago. Prices remain weak both locally and globally and a major recovery is not to be expected in the short to medium term.
