Updated 3 December 2018
Plenty of rainfall has boosted grass growth over most of the country, and more rain is forecasted in the coming week. Farmers are watching the grass bolt away, and it is looking as though everywhere will be well set-up until at least the new year.
Bookings of cattle have slowed following multiple weeks of rain. Reports are variable as to how short processing plants are on supply, however there is no denying that weekly throughputs are below typical for this time of year which is mainly holding prices steady. Margins remain an issue for processors who are signaling a decline in printed schedules unless there is significant change in where the New Zealand dollar is sitting. Store prices have lifted across the board with a typical grass market in full force.
African Swine Flu (ASF) is tightening its grip on the Chinese pork industry. The number of pigs culled in China is reportedly over 470,000 head, with Chinese pork production predicted to fall 10-15% for 2019-2020. This deficit of pork looks unlikely to be met by pork importers which provides a significant opportunity for New Zealand beef. The US beef market has firmed further but is still low compared to past years.
The disconnect between processing capacity and new season lamb supplies has remained too large for meat companies to get any price reductions to stick. A historical trend of surging kill rates in December will have processors biding their time to make sharp price corrections if this happens. There is no shortage of confidence in the store lamb market as farmers look for utilize feed growth. The market at the sale yard has firmed, with medium and light lambs pushing over $4.00/kg in some instances.
China is not only taking greater volumes of our lamb exports, but they are also paying more for it than ever before. The average value of lamb exports to China in October lifted 2.5% on September and 13% on October 2017. Demand is underpinned by New Year celebration requirements, however there is no expectation for things to change to drastically after this window of demand.
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Together we were able to launch the AgriHQ Finisher Tool which was developed with the intention to make livestock buying decisions easier for farmers today.
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Commentary provided and written by AgriHQ and the opinions expressed in the commentary are solely those of AgriHQ not necessarily those of Heartland Bank.
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