LAMB
Lamb schedules remained steady this week, as the recent lift has been credited to a small opportunity in the UK chilled market, but dampened demand is seen out of China due to a drought driven increased domestic supply.
Lambs are now being checked for teeth growth as they change into hoggets’, and there has been a surge of processing numbers as farmers look to beat the impending discounts.
Christmas trade contracts are around the $6/kg mark but are predicted to fall significantly over the summer period for frozen carcasses.
Lambing in the southern foothills is now in full swing and good weather and satisfactory feed supplies suggests strong lamb survival rates, while in the north docking will be well through and farmers will be readjusting their budgets.
Weak demand for lamb pelts and an oversupply of sheeps runners are both impinging on sheep meats pricing, and some analysts are pessimistic returns will not even reach last year’s average results.
WOOL
This week’s South Island wool auction was again weak, and only 78% of the offering met vendors expectations in a market short on demand.
Crossbred indicator prices again fell to lows not seen for three years, and will be especially disappointing for farmers as buyers report the quality presented has been excellent.
Wools of NZ posts it's first annual profit at $1.48 million but still need income from its Wool Market Development Commitment to continue to be viable. While now only a small percentage of this firms income the loss of this funding in mid 2018 will test it's business plan, and it's assurances to shareholders, that it can standalone and be profitable after that time.
Wools of NZ are offering two second shear contracts that with specfic specifications are returning $4.40-$4.70/kg clean to growers which they say is 10% above the present spot market.
BEEF
More beef schedule falls this week, as the US market remains very quiet as record domestic kills for cattle and pigs has driven prices lower, and caused some closures of big feedlots.
Local trade schedules have fallen with export in the north island but remained stable in the south where animals are slower to fatten.
Prices for prime steers at saleyards are steady around the $3/kg live in the south but 20c/kg lower in the north and are 20-30c/kg behind last year, but as yet store animals are selling at prices well ahead.
Ravensdown has fixed the price of super at $310/tonne and pledges to keep this price stable until the 16th December, amid reports of increased usage of the product as dairy farmers return to all grass systems.
DEER
Venison schedules eased this week, as numbers filled the plants chasing the chilled market premiums.
Alliance announced the building of a new specialty venison processing plant at Lorneville as they plan to reduce killing costs by 30%, and as part of this change to replace the Makarewa facility they will also sell farm land for the new dairy hub for Southland.
Velveting stags will be being harvested now in big numbers and frozen down for early sales, but as yet there has been little indication of where the market is at.
M2 Bull
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18 Comments
MY agent tells me that his boss thinks beef prices will hold up till Christmas and then shapely correct, makes no sense to me but good luck.
News from the States is still dismal. Store buyers are paying high prices based on present schedules, which even the meat companies are saying are unsustainable, perhaps we have good contracts with China.
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Truth is with beef production above the 5-year average for 8 weeks running and pork production above the 5-year average (and record high) for 15 weeks running, end users are seeing more product offered than in years. This is not new, but it is not going away and will operate as a negative back drop.
Feedyard clean up last week again was not complete and again, some cattle were carried over in some spots. Cash this week, before futures sold off, was generally thought to be steady, maybe even a touch stronger. Now that thought is in question.
http://www.thebeefread.com/
Yesterday’s limit down move has left most cattle traders despondent, in spite of today’s green screen. Even if you’ve been bearish, the cattle market’s inability to stabilize, let alone bottom, seems to be looming even larger this week and no one trusts a rally.
No, this market has a new set of issues resulting from macroeconomic changes in demand, supply, throughput, margins, competition that no one seems to be able to get a handle on accurately or quickly enough. How else does one explain a historic two-year decline with no end in sight?
Weird world Belle, lock down limits again last night. No bottom in sight. You can buy a autumn friesian bull for more than my friends top Angus weaner steers in California. He told me that many farmers are going to the wall and he didn't make enough this year to cover his summer grazing bill.
So sellers were walking out of the auction as prices fell through the day.
PLAINS MARKET TALK
Cash Cattle. There was a hopelessness feel to the market yesterday. No more talk about a market bottom -- it seemed like there was no bottom and very little to interrupt the decline that just won't stop. In the south feeders sold cattle at $98-99 live with volumes limited. Wednesday's live auction sold fed steers in bulk from $99-99.75 with nothing bringing a dollar and several lots passed out after a listing of $100 as the minimum price. In the north cattle sold for $154-155 dressed and $97-99 live. Short of opening a new slaughter plant, there was very little to change the current operating environment that is pulling equity out of the feeding industry at a record pace.
I don't know to be honest, Affco tell me the beef price will stay up till Christmas, walking on air perhaps.
There will be pressure to keep the price up until indebted intensive farmers with large numbers of bulls offload.
At the Nth California cattle auction they actually stopped and talked to farmers about the terrifying appearance of Brazil on the world market.
http://www.weeklytimesnow.com.au/agribusiness/decisionag/the-brazilian-…
http://chinaag.org/2016/08/11/brazil-passes-australia-as-mainland-china…
everyone is heading to China
http://chinaag.org/tag/beef/
You see, Queensland’s meat business is not making enough profits to cover costs. And now there is a real disconnect between rural debt and farm production, as shown in the chart below.
http://www.dailyreckoning.com.au/aussie-export-bursting-debt-cw/2016/10…
and the same production that farmers have pledged to debt repayment is the same production others have pledged to housing repayments. Just a giant house of cards.
http://www.milkbusiness.com/blog/trade-deals-potential-for-big-profits-…?
Next time the library van comes.
I have it sitting on the shelf, I will have to get started on reading it.
Found this link for you
For the week ending October 1, dairy cow slaughter totaled 56,233 head, down 5.2%
from the same week a year ago. This brings year-to-date slaughter down 1.6%. The beef
market continues to struggle, incentivizing dairy producers to keep a lid on cull rates.
Live cattle futures have plunged to their lowest level since mid-2010. Like many agricultural markets, beef prices are suffering from surplus.
http://www.milkproducerscouncil.org/updates/101416.pdf
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