The Weekly Livestock report: GMP price set at $7, US beef prices fall, currency drop helps wool

DAIRY

With moisture plentiful in most regions, farmers are now careful to ensure the good pasture recovery is well utilized and damage is minimized in wet conditions.

Cows are now on their winter feeding regimes with some reports in Canterbury the dryland brassica crops yields are measuring lower than expected, but most predict feed supplies will be adequate unless weather extremes intervene.

The latest global trade auction prices eased on the highest volume of product offered since mid February to record the third decline in a row as the market readjusts to more sustainable levels.

Countering this easing is a currency that has fallen 8% in the last month and is helping all exporters remain competitive in this difficult trading environment.

Fonterra’s Guaranteed Minimum price for milk is set at $7/kg/ms and banks will be looking at highly geared farmers and new conversions to lock in this price as a risk hedge.

The fencing of waterways intiative for the dairy industry is well advanced with predictions by one company they will have met the 2017 target by December this year, and show the commitment most farmers have to reducing the environmental footprint of their industry.

LAMB

The lamb schedules are quietly recovering from the autumn lows but farmers are still waiting for proposals that will make them more optimistic on future prospects for their sector.

The Meat Industry Excellence group have brought Federated Farmers into the loop on the progress on industry restucturing as momentum builds for a long term solution.

The Situation and Outlook report for Primary Industries reflects on the impact of the drought on sheep and beef farms and the need for future restocking of breeding numbers.

They predict exports will further decline this coming year on the back of that drought and animal numbers will continue to fall until 2017 due to more competitive dairy land use pressures.

This is the challenge the Meat Industry Excellence group and the processors face as they strive to create a sustainable model to drive the turnaround with Beef and Lamb NZ assuring farmers they will help fund the work on the new strategy.

WOOL

The latest South Island sale again saw high clearances and coarse crossbred indicator values at a yearly high at 426c/kg clean, with the easing currency and supply shortages helping drive demand.

The next North Island wool sale is offering 36% less than anticipated quantities and shows how the drought and land use changes are reflecting on supply.

PGGW have chosen past CEO of Livestock Improvement Corporation Mark Dewdney as their new head man and it is hoped he can resurrect the fortunes of this once strong company.

BEEF

Beef schedules remain flat this week as a surge in the cow kill has brought more product to the market earlier, and reportedly created surplus stocks of manufacturing beef in the US market.

NZ's volumes have increased significantly into this market ahead of our trading competitors who shipped their product elsewhere.

Currency falls against the US are helping but big the growth of beef exports is into China where the Free Trade agreement has helped reduce tariffs and some product normally consumed in Japan and Korea is being redirected there.

Tight feed supplies are still driving store stock prices but early bull sales have started well with values up and passings low.

DEER

Reports from the conference suggest the velvet industry is content with stable pricing but with demand for traditional Oriental products in decline the industry needs to get more innovative in promoting this health product.

The continuing flat venison schedule reflects the weak demand and strong feral competition for this product out of Europe and marketers are looking at future strategies to revive interest.

Dan Coup is the new CEO to lead Deer Industry NZ through the next period where its Passion 2 Profit strategy looks to increase venison profit by $2/kg over 10 years.