The Sheep Deer and Cattle Report: Beef farmers warned that present prices will not continue as global export production lifts

LAMB

Some significant drops in lamb schedules this week, as market insecurity continues, and the end of September deadline for OIO approval for the Shanghai Maling deal, nears.

European and North American demand remains strong but it is the UK, Middle East and Chinese trade that seems likely to drag down the seasons prospects.

Skins and casings demand is behind last year and with the recent weaker demand for wool the by products of the animal are all unhelpful in boosting sheep returns.

Sheep farmers desperately need some better market news and a new vision for the future, or stock numbers will keep falling, putting more pressure on the over capacity of the processing sector.

Lambing throughout the country is now in full swing with southern flocks starting and northern ones fnishing, and most have had reasonable conditions for good survival.

And every lamb will be needed with the present pessimistic meat forecasts and real fears are held for January/February schedules.

Alliance has announced a $7.5 million upgrade at it’s Pukeuri plant, using robotic cutting machinery to improve cuts, minimize waste, and meet health and safety requirements.

The Tinwald saleyards has announced closure as a result of landuse changes out of sheep, and vendors will now have to use facilities at both ends of the region to sell their livestock by auction.

Rabbit numbers are once again set to explode in Central Otago after 3 dry winters, as this pest is proving very difficult to control especially in these rugged environments.

WOOL
This week’s South Island wool auction fell again, and only 55% of the offering met vendors expectations.

Another currency lift, and restricted activity from the markets, mainly China, was again the main reasons for the poor sale, and crossbred wools fell to new yearly indicator lows.

Merino and mid micron wools also fell in price by 1-8%, disappointing vendors who earn a big percentage of their farm income from the product.

BEEF
Beef schedules fell this week, as poor prices for US domestic beef continue to overhang the market, and some believe exporters will face a big correction soon especially for manufacturing cuts.

Prime cuts are faring better with strong support from Asian markets and strong demand from the local trade buyers has kept export processors competitive.

Prime steers at saleyards however are still selling at values well behind last year, but store stock well ahead, so an adjustment may soon come, when finishers sell and need to replace.

Rabobank warns beef producers that the current price peaks are unlikely to be sustained in the medium to long term, as global beef production increases and competition from other animal proteins strengthens.

China is once again seen as the most promising of markets for these increasing global export volumes as their domestic production will soon fail to meet internal demand.

The proposed new Shanghai Maling partnership for Silver Fern Farms could be really important in this market development into this country and give NZ an early start to compete with expected South American export competition.

DEER

The true value of the chilled trade was revealed this week as Silver Fern Farms and Alliance offered $8.80/kg as its high season price.

This value surpasses last year’s high, inspite of the currency, and producers will be hoping such a high level of return will not suppress demand.

With a tight time frame determined by shipping deadlines, chilled venison produced and sold at this price will only be achievable by those highly organised strong feeders, who have planned way back in March, to harvest in this peak schedule period.