The Sheep Deer and Cattle Report: Sheep, deer, and beef cattle numbers fall, but price prospects still look good for beef, venison and velvet.

LAMB

Lamb schedules are still easing back as the weak currencies of our trading partners are hurting farm gate returns.

Demand remains stable in all of our main markets as the Easter chilled production period nears, and early gas packed product will start next week to the UK.

Sheep numbers continue to drop down 1.5 million on last year, as the sector has suffered a 30% fall in the last 10 years, and the nations sheep tallies are now just 27.6 million.

Silver Fern Farms announced a big loss for last year of $30 million, although a large part was due to a write down with the new partnership deal, but a $7.5m trading loss was still very disappointing for all shareholders.

No more excuses are left in the drive for profits by the new Chinese backed company, as the directors have gambled everything on this new direction to turn this processor around.

They plan to pay the sweetener from this deal in February with a 30c share dividend, and this will be welcome by cash strapped sheep farmers.

Blue Sky Meats had a meeting with Chinese backed NZ Binxi (Oamaru) as they look to progress the takeover bid, but with a soft market and falling sheep numbers they look to be in a weak bargaining position.

Store lamb prices have eased back with the falling schedules but more in the north than the south where a $10 / head advantage applies.

WOOL

Last week’s North Island auction found new lows for crossbred wool, and some fleece wool that did not even reach $3/kg clean would be very unprofitable for the vendors of these offerings.

One wool exporter is blaming Trump and his anti trade views for unsettling the Chinese from buying product, but it is ironic that merino wool in Australia is trading at near record highs.

BEEF

Some more summer easing of prime beef schedules as processing volumes increase, and the currency influences farm gate returns.

Processing numbers are 11% behind last year but as less bobby calves have been killed this could indicate more have been reared to fill shortages seen in saleyards for store animals.

Demand for chilled beef remains firm and US bull beef prices have flattened, and some analysts remain positive for prospects in that market for 2017.

But political instability in that country could change that optimism in an instant with the new leaders taking power this week, and beef farmers should be cautious with their pricing, until the market becomes clearer.

Big dairy weaner sales have been held in Temuka and Fielding and achieved continuing strong pricing of last year with top well bred bulls and heifers making over $5/kg lwt.

DEER

Venison schedules eased with the first fall for seven weeks, but still at summer levels $40/hd ahead of last year.

Velvet sales are moving again as the Chinese regulatory problems are being met and surplus quota is utilised for product keen to be sold.

Prices are back to levels achieved about two years ago (around $100/kg), but with currency effects and historical averages considered, industry officials consider the drop manageable.

Of the estimated 620 tonnes grown about a third appears to have been traded, into a market still demanding NZ velvet and its quality controls that backs up its premium position.

Industry insiders are picking weaner sales will again be strong with demand for replacement females growing, and some finishers deciding young deer may be more profitable than lamb or cattle options.