The Weekly Livestock Report: Volatility good for dairy futures trade but hard on farmers nerves

DAIRY

The early spring rolls on especially in the north as evidenced by higher pasture D/M readings, increased milk flows and better BCS scores in animals.

Managers have responded with faster rotations, less supplement and nitrogen use, and even the odd paddock shut for silage as they strive to ensure pasture quality is maintained to maximize milk flows.

They are getting increasing frustrated by the performance of their processors however, as another food quality issue alert was made by Westland Milk Products that saw the Ministry of Primary Industries revoke export certificates for four consignments of lactoferrin exported to China.

The fallout continues in the Fonterra food scare with the resignation of executive Gary Romano and forced leave of two managers as the inquiry into the system failure moves into gear.

The industry braces itself for change with some questioning the wisdom of NZ’s increasing reliance on dairy for its growth, the future of self regulation in processing, and most accepting that increased testing of product will be needed if we are to maintain our reputation.

There has been little market reaction to milk pricing data as yet, but the futures trade for dairy commodities has had a surge in activity as volatility and risk are managed with this new tool.

LAMB

Lambing is now under way in many areas and the mild conditions are welcome as every live lamb will be needed by those recovering from the drought.

Prospects continue to look good for the coming season and marketers report increased sales of product into the UK and Europe with the barbeque season reinvigorating demand.

Rising schedules show that processors are still chasing lambs for chilled orders but warn finishers to keep and eye out for permanent teeth emergence which will see animals change grade from lamb to hogget.

Across the Tasman, Meat and Lamb Australia also agree that falling world production, an easing currency and resurgent overseas demand, paint an optimistic future forlamb.

PGGWrightson announced a financial result that was back on market expectations with the drought affecting earnings and a big goodwill writedown associated with the merger back in 2005 affecting the result.

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WOOL

The latest two island wool auction saw crossbred wools continue to prosper but mid micron fibers languish at values not seen for nearly two years.

Indicators were all back on the last sale with an appreciation of currency and the bigger volume of wool influential, and the first parcels of Merino wool sold at disappointing prices.

Wools of NZ announced that they have 14.5m kg of wool from 700 shareholders but also have 300 non shareholders that are prepared to commit their wool for the year and state contracts are out soon.

BEEF

Local trade and prime beef schedules reached yearly highs and shortages of animals has even seen one southern processor cease killing until volumes improve.

Saleyard animals are well sought after in a market where grass is growing rapidly, but the increased volumes of bobby calves have caused the market to ease.

DEER

More schedule rises as early hybrid animals reach their chilled spring contract targets some of which will benefit from a favourable exchange rate option as the Euro has eased by 5 cents.

Some early velvet heads are now being seen and price prospects looks similar to last year in the $100/kg range.

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Here are some links for updated prices for
- lamb
- beef
- deer
- wool