The higher dollar is resulting in lower prices except for lamb and mutton. Saleyard demand continues to underpin prices, and undermine company efforts to relay end-market signals to producers

By Guy Trafford

After the heavy and cold rain of last week Cantabrians will be hoping the current fine weather holds with the A&P, sorry Agricultural Show and Cup Week taking place.

With the teachers on strike the show may get two bites of the cherry from the junior brigade as the show, which runs from Wednesday to Friday, is timed to coincide with anniversary day on Friday which is generally the ‘publics’ day. However, hard pushed parents may use the opportunity for some ready-made entertainment to burn up some of the out of school pupils energy.

Throughout the country the shows are designed to serve several purposes. Initially a way for breeders to show off their animals and produce, a purpose which still exists although probably at a lesser level. A place for rural sporting activities ranging from wood-chopping to dog trials and horse sports with motorbikes also increasingly creeping onto the scene.

Retailers use the opportunity of getting a large percentage of the local rural fraternity together to show the latest in technology which can normally be bought at ‘show specials’ prices and of course the side show entertainment that are synonymous with the A&P shows. As people tend to attract people, especially when there is entertainment to be had, a healthy proportion of the visitors come from the urban sector. Hopefully these people keep their eyes open and remind themselves just how large and important this occasion is and how it reflects the ‘engine’ that keeps the New Zealand economy ticking over.

One of the most poignant reminders of the livestock sector, in my view, is the sheep maternity wing. A feature of the Christchurch for as long as I’ve been attending (a relative newcomer) is the sight of heavily pregnant ewes mated to time their lambs’ arrivals with the show is always entertaining, watching young folk experiencing probably their first glimpse of new life entering the world. Activities such as this are a great way to bring the countryside to the city and to try and engage the urban sectors with farming. While the shows are primarily put on for the farming sector, bridging the gap with the cities may will be their most valuable contribution and long may they last.

While many shows have made the decision not to include cattle classes, Christchurch as did the Hawkes Bay show earlier in the spring have decided to go ahead with cattle entries after making special provisions to try and protect animals from the risk of being exposed to M.Bovis. Whether farmers are prepared to take the risk will soon be revealed, however, at best it is likely numbers will be down.

Markets

SHEEP

No dramatic changes to prices this week. Most companies have moved into the new season lamb schedules but with little change from what was being paid for last years born lambs. Store lambs that are close to finishing or indeed ready for processing are achieving good money but lesser lambs are starting to be discounted. Mutton had a small lift which is welcome news given the lifting dollar. Some processors are calling for farmers to commit on a contract to supplying lambs through the season. The carrot being a 10cent margin per kg over and above the schedule price.

While I am a supporter of contracts and the belief that the industry needs them to provide certainty to both farmers and processors alike, given the prices that were paid at the saleyards in the season just gone I would be surprised if farmers don’t hedge their bets and not commit a large percentage of lambs to enable them to benefit from the premiums seemingly able to be achieved on the spot market. The processors only have themselves to blame as they are the one buying the lambs at inflated prices and farmers are just behaving rationally in this environment.

Statistics NZ have just published their latest consumer prices. Vegies have fallen and generally lowered the price of food however, lamb chop prices jumped 7.7 percent from September, reaching a record high $17.12 a kilogram, while the cost of sausages climbed 4.9 percent to $10.30 a kilo, according to Stats NZ. Sirloin steak has come off its recent high in September to $30.72 per kilogram. It may be difficult to find a cheap cut for the BBQ as the Countdown supermarket chain is now sourcing its fresh pork from the free range producer Patoa Pork. Hopefully this decision will mean also reducing their dependence upon imported pork for their processed lines.

WOOL

No good news on the wool front with continuing softening across the board. This week’s sale is being held at the Christchurch Agricultural Show if readers feel like seeing what is likely to be another soft sale. Little finer wools were sold last week, being in the North Island and crossbred wools were down by between 8% - 14% and with a quarter of offerings passed in not a great scene for growers.

BEEF

Cow schedules dropped this week largely on the back of the dollar’s strength and the soft demand in the US. Prime beef had a small drop but saleyard prices seem to be still holding.

VENISON

It is looking like the halcyon days of being over $11 per kg may be coming to an end with prices down to $11.10, -30 cents below the high and the trend moving down.