New year sees all prices easing and southern feed drying up

LAMB

Lamb schedules start the new year in decline, and despite early optimism prices are now behind last year.

Exporters report that some key lamb markets are under pressure, and low oil prices are reducing spending in the Middle East, and with pelt returns $5/head behind last year schedules have eased significantly.

A flat schedule option with top ups is being offered by Alliance, but at $4.25/kg as a base figure will do little to stop the exit from sheep now down to under 30 million.

Taylor Preston is encouraging lamb producers to hold on to the mid January/February period, to meet strong Easter chilled lamb demand, but with dry conditions this is easier said than done.

Silver Fern Farms have announced a provisional profit result of $1.8 million which is a good turnaround after last years result, albeit a dismal return on capital, but they have held $3.3 million back as a provision for the redundancy case costs at Mosgiel.

They have also announced they will seek $100 million of new equity to repay debt, upgrade plant, and accelerate it’s valued added strategy, but also plan to separate the business into animal entities which some cynically suggest makes them easier to sell.

Landcorp has announced they are planning a sheep milking operation, starting with 2500 ewes, as they look to keep their livestock operation diversified.

.WOOL

The auction sales recommence with a large North Island sale of 13,200 bales on the 8^th January and with wool volumes low, prices should hold.

It has been suggested that the present lack of demand for merino wools is supply driven, with the drought in Australia increasing volumes of fine wools ahead of what the market can sustain.

Landcorp obviously likes the Merino NZ model, as it has committed all its coarse wool to a 3 year deal, as it looks to get extra value for it’s clip.

Shearing record attempts are being planned over this period but with sheep numbers falling, concerns are being expressed where future shearers will come from.

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BEEF

More beef schedule easing, as US prices have dropped on the back of plentiful Australian supplies, and some chilled price pressure.

In the south as feed supplies tighten, numbers offered to the processors increase, and space is now at a premium.

The US currency is easing against the kiwi as that countries economy picks up, helping our beef pricing, but the sheep and deer sectors remain constrained with a weak European economy, and a rising Euro.

DEER

More small summer schedule easing, as exporters report 2015 prices are thought to remain similar to last year.

Early stag sales have seen respectable average prices but disappointing clearances for animals with only venison genes, while velvet animals have been well sought after with good prices and nearly 100% sold.