The Sheep Deer and Cattle Report: Lamb prospects look rough as beef and venison rise

LAMB

Another week of stagnant lamb prices as the world economic woes in China and Europe have affected sheep product sales.

Chilled spring lamb contracts are being offered by one processor in the $5.30-$6.00/kg CWT range, to give some certainty for winter and spring finishers, but issues with frozen stocks remain.

Lower grade lamb and sheep skins have been described as difficult, as demand from the garment trade is weak, but interest in wool is helping to add value to per head returns.

South Island saleyard prices for prime lambs have been stable since the start of the year, but chilled export demand and a recent lift in values offered by local trade processors, will have improved margins slightly for winter and early spring finishers.

In the north the lack lustre market has seen finishers harvesting early, and space is at a premium with some plants in their winter shutdown, but as yet little prospects for any upside price movements.

Both leaders from the meat Co-Ops have been expressing their views on the future of the red meat sector as shareholders are getting impatient for change, with Silver Fern Farms chairman Hewett saying an announcement on the capital raising options would be revealed later this month.

He was optimistic that this years financial results will show the company has turned the corner, and stated they were on target to achieve a reduced debt level to $150m, but is less optimistic for the new seasons prospects for lamb, citing China's retirement of grazing land resulting in government incentives to kill capital stock has increased domestic supply.

Live sheep sales to Mexico could continue into the future, as agents suggest demand for 250,000 animals a year is possible, but concerns have been expressed of how this will affect the future of our processing industry, but with the present economics of the sheep sector many farmers will find this option difficult to ignore.

There has been little relief for drought hit farmers in North Canterbury, with decisions now needed on where animals out on grazing will go for lambing, as properties still have not got sufficent feed even for reduced numbers, and those that choose not to sell, are looking at sharefarming options.

WOOL

The first wool sale of the season was from the north island, and the small offering of mainly second shear wools sold at slightly easier values.

Economic uncertainty caused by the Chinese stock market made buyers cautious, and overruled a currency that was significantly lower than the last sale.

Price indicators are however well ahead of the similar sale last year, and with little stock in the pipeline hopes are high for a reasonable value season.

Aussie scientists have mapped the blowfly genome as they look to solve the damaging problem of fly strike in the sheep sector.

BEEF

Beef is the good news story of livestock, as prices continue to lift as winter export volumes ease, although in Australia consumers are starting to baulk at the high prices and are purchasing cheaper alternatives.

Prices are still building for prime steers at the saleyards, and in the south some steers in the 480- 580kg weight range sold for over 300c/kg lwt.

Fixed price contracts that have been offered at $6/kg in the spring will underpin prices for heavy cattle at the saleyards, but numbers are proving hard to source after an earlier than normal harvest.

The Commerce Commission is investigating PGGWrightson and some other stock firms over fees charged with the NAIT tagging scheme.

DEER

The venison schedule rise continues, and a young 60kg male carcass is now worth $400 a head, which is $30 more than last year, as one processor reports their frozen product is fully sold, and chilled demand is firm.

Committed deer farmers are working hard to improve their on farm performance with numbers involved in the Advanced Party system growing.