LAMB
More price lifts for the winter period, as schedules rise in response to shortages in the Middle East, and the Chinese market moving into it’s biggest consumption period.
These lifts have been followed by saleyard sales, as last week’s prices averaged over $100 for prime lambs for the first time since November last year.
Store lambs also rose, but numbers offered are sure to fall soon as the winter starts and quality feeds will be needed to keep the breeding flock maintained.
Good rains have arrived for the dry areas but also snow on the foothills and with it frosts are sure to follow dragging soil temperatures and winter grass growth down.
Most breeding ewes will have started their winter systems with the pasture rotations back to maintainence, especially in the dry areas where quality brassica feeds will be saved for later in the pregnancy.
Many without surplus grass are using feed grains that are currently being traded at prices that are at the lowest levels for 6 years and a cheap source of quality feed to fill the gaps caused by these shortages.
More government monies have been allocated to irrigation developments in the Canterbury region, and some for a scheme to recharge acquifiers with a goal to dilute nitrate issues in the Hinds catchment.
WOOL
The single South Island wool auction last week saw prices lift, as the slightly weaker currency and better styled wools attracted stronger demand.
Prices rose from 1.5-6% on the last North Island sale but surprisingly 24% of the offering was passed, with vendors holding out for better prices, especially for stocks of lambs wool.
BEEF
Good lifts in beef schedules this week, as supplies shorten with the approach of winter, and demand strong in the chilled beef area.
The US report, beef is having to compete strongly with cheap chicken and pork, as the market is unsure of how much stocks are being held for the demand ahead, especially as Australia supply is falling.
NZ beef producers were warned by a Brazialian beef analyst of that countries growth in the global market, with genetics and cheap grain allowing rapid increase in carcase weights from that country.
Bull sales have started and after big interest and participation on farm walks results from sales at the Beef Expo were disappointing with the top judged bull only making $6000.
Unfortunately a fourth line of fodder beet seed has been found to be contaminated with velvet leaf seed and it now appears farmers will have to learn to control this weed in the future, as eradication is now an unrealistic goal.
DEER
Venison schedules remain in their summer mode for another week, but the early chilled programmes are due to start in June and July, and prices are predicted to be strong.
The sector will be buoyed by news of growth again after a long period of retrenchment, and the breeders in the foothills will enjoy better value for their female stock after years of unsustainable prices.
M2 Bull
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8 Comments
Just increased herd size in USA and huge growth in the Brazil numbers
US - USDA's May Cattle on Feed report said there were 1.3 per cent more cattle on feed than a year ago. April placements were up a surprising 7.5 per cent and April marketings were up 1.2 per cent, write Ron Plain and Scott Brown, Ag Economics, MU.
The Chinese market is opening up to Brazil, with five more plants opening access recently which brings the total approved plants to 16.
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This is different from what is happening in South America, where Brazil, Argentina and Uruguay are all quickly rebuilding their herds. Consider these numbers. At this point we do know the US cattle inventory as of January 1 was 91.988 million head (+2.8 MM) and the Canadian January 1 inventory was 11.960 million head (+40k).
USDA estimates the Mexican January 1 cattle inventory at 16.450 million, down 670,000 head.
The combined North American cattle inventory on January 1 thus is estimated at 120.4 MM head, 2.2 million head (+1.9 per cent) higher than a year ago but still 13.8 million head (-10.3 per cent) from what it was in 2005.
Now consider the January 1 inventories in Brazil, Argentina and Uruguay. These are the equivalent of our July inventories but we are looking at the trend here. According to USDA, their combined inventory as of January 1 was 283.2 million head, 6.5 million head (+2.4 per cent from a year ago). Since 2005, their inventory has increased by 47.3 million head (+20 per cent). If we were to also add the Indian buffalo growth, the numbers become staggering. And ultimately that is what is driving the retreat in global beef prices.
Brazil is expected to double its export volume in 2016 to China, shipping about 200,000 tonnes. This increase would rank Brazil as the top beef exporter to China in 2016.
World cattle herds
http://beef2live.com/story-world-cattle-inventory-ranking-countries-0-1…
Total Chinese dairy import volumes originating from New Zealand declined 7.9% YOY while import volumes originating from within the EU-28 increased to a new monthly record high during Apr ’16, finishing 69.4% higher on a YOY basis.
http://www.attenbabler.com/chinese-dairy-imports-update-may-16/
Brazils evolving market access mean new paradigm for global beef trade
http://www.beefcentral.com/trade/brazils-evolving-market-access-means-n…
Someone should be shouting from the cattle yards, that the beef price has potential for a complete and utter collapse.
Who really thinks that the USA store price can half and it's still falling ,won't affect prices here?
I just sold the last of my cattle at just a smidgen under $1300 for 450 kg 18mth bulls , people are buying thousands stacking them up behind wires, are we completely friggin mad or are the banks behind this and there in lies the madness. Not that it matters that much now we have found the secret to untold riches in the housing market.
Cattle Futures.
Reaction to the Friday COF report sent futures limit down in early week trading. Futures will operate today with an expanded limit giving traders a chance to reposition. Instead of the June live cattle futures rising to the cash market, it is dragging the cash market lower. With evidence mounting of larger supplies late in the year, futures are seeking to establish a new trading range not seen in years.
http://finviz.com/futures_charts.ashx?t=LC&p=m1
CME cattle futures made new lows for the move today, though there have been a few intra-day rallies to sell- or raise a bull’s hopes- depending on one’s bias.
Though it is not showing on Mandatory Price Reporting, a rumored traded yesterday afternoon in Nebraska for $198 dressed to a major packer for delivery this and next week, sent the jitters through many cattle feeders as the news spread. Whether true or not, it was a graphic reminder that the path of least resistance continues to be lower, given the calendar. It’s the “how much lower how fast” that is in question.
Oklahoma City. Prices as expected were $5-10 cwt. lower on all classes of replacement cattle. Feeder steers weighing 7-800# sold from the mid $130s to the low $140s. Feedlots are realizing the entire pricing scheme of replacement cattle needs to ratchet down. The full brunt of the price decline will eventually fall on the breeder as all segments of the industry in the live animal sector struggle for profitable operations.
Cattle shipped from winter grazing fields have been heavy this year following ideal winter grazing and large rate of gain on pasture. Many cattle normally shipped in May were removed from pastures in April but there remains large supplies to be placed on feed this month providing mounting numbers of cattle on feed. Many feedyards are full and not accepting new placements leaving pasture operators to stagger cattle offerings into June. Basis trades are now off the August feeder board.
http://www.agcenter.com/newcattlereport.aspx
Dairy farmers will be sending a lot of bull calves to the sales soon, and drystock farmers seem to be enthusiastically buying anything that is offered so my pick would be that the NZ market will be very over supplied in 2 years time.
It is just crazy at the moment, I have heard of 4 day old bull calves selling for $450, 87kg friesian calves selling for $600 etc.
Not a bad season if you are a calf rearer, cheaper milk powder and very good selling prices.
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