AgriHQ report August 19
The July export statistics show that total lamb exports for the season to date have now dropped below last year’s levels (-18 percent) to 18,000t. This follows the very short supply of slaughter lambs, since May. The national lamb kill is 6.7 percent or 1.2 million head down on last season to July 20. Despite the tighter supply, July exports to China were up 3 percent on last year at 7700t. Exports to China accounted for 42 percent of our July total which is consistent with the market share in the season to date. Export returns from China are still looking very strong with the current AgriHQ indicators for lamb flaps and forequarters NZ$1.66/kg and 80c/kg above last year’s pricing, respectively. July exports to the US dropped 25 percent on last year’s volumes to 1600t due to weakening demand and tighter overall offerings. However, pricing in this market is similar to last year which is positive. There has been some pressure on French rack items in the US market due to growing inventory and this is starting to put pressure on pricing for lighter racks. Market share for exports to the UK and EU remain below last year’s levels as exporters navigate tight supply, Brexit concerns, heatwaves and a sluggish UK/EU economy. July exports were down 24 percent or 1800t on last July at 2100t. The AgriHQ indicator price for the CKT leg product in the UK is 75c/kg ahead of last year at NZ$9.82/kg. This is despite a higher crossrate with the GBP cutting into returns. Pricing for the ABO leg product into the EU is NZ 30c/kg below last year’s levels at NZ$10.07/kg. The EU French rack indicator remains firm, up $2.30/kg on last year at NZ$34.30/kg.
The dairy calving season is in full swing, but calf rearers seem to be thin on the ground. One driver is the lacklustre returns on last year’s calves. A short supply of labour for calf rearing is also not helping. But, by and large, it is the Mycoplasma bovis eradication program which is sapping enthusiasm for calf trading. While the number of currently infected properties has reduced down to 18 farms, there are still plenty more farms caught up in the system. There are 232 farms under movement control and 630 farms under active surveillance. Understandably, calf buyers are showing some caution about where they buy their calves. They also seem to have less options for calf-rearing contracts, particularly in the South Island.
With “M. bovis risky” South Island bulls proving almost unsaleable in the North Island, South Island calf-rearing contracts are harder to come by this season. Those contracts on offer this year seem to be $35 to $80/hd lower than last year with 100kg Friesian bulls contracted for $420 to 475/hd. Looking to the saleyards, feeder calves have been more plentiful at Feilding sale this season with 1600hd compared to 1200hd this time last year. Good quality calves are selling, but prices have been about $10/hd lower than last year.
Venison schedules have remained steady in both islands for the last few weeks for AP stags. The North Island is sitting at $8.85/kg which is now $2.20/kg below last year. After dropping 5c/kg, the South Island slaughter has held at $8.85/kg, which is a decrease of $2.55/kg from the same time last year. Historically, schedules begin to rise from this time as the chilled season starts up and typically peaks in mid-September. Contracts are beginning to appear for chilled venison, with reports so far of levels up to $10.00/kg. Demand is reported as reasonable, despite buyers taking longer than usual to enter the market. The frozen venison market has stalled due to low demand from the US and EU, with some exporters beginning to accept lower prices after trying to hold out for an improvement. The petfood market is also a struggle due to the US having good stocks on hand.