AgriHQ report June 14
For the past four weeks, North Island 32-34kg ewe lamb prices have held at $3.75/kg. This is the highest price for this time of year over the past five years and outdoes the five-year average by 70c/kg. Evidently, the market has found a level for these options and this is keeping prices static. Thirty-eight kilogram male lamb prices are also strong against the past five-years, and are surpassing the five-year average by 63c/kg.
This equates to an extra $24/hd, which is tight on the extra $20-$25/hd available at the farmgate compared to the five-year average for 18kg-23kgCW lambs. The upward trajectory of slaughter prices is instilling good confidence in store lamb buyers, and is expected to keep the market firm this week.
Australian beef has been notably absent from export markets this season. Prolonged droughts meant that the Australian national beef herd was down to a 25-year low last season. The herd was projected to grow by 5 percent this season to 25.9 million cattle but the total kill was expected to drop to a 36-year low as farmers retained heifers for breeding. The drive for herd rebuilding may be stronger than anticipated with Meat & Livestock Australia recently revising their slaughter projections for this season from 6.9 million to 6.4 million. The annual Australian cattle kill usually sits somewhere between 7-7.9 million, but it is not expected to recover to these levels until 2023. Australian beef exports are currently 24 percent below year-ago levels for the calendar year to date, which is creating holes in the global beef supply that New Zealand is only too happy to fill. Very strong farmgate beef prices in Australia mean that Aussie farmers are getting a pretty good deal too.
The venison average export value strengthened by 41c/kg to $10.65/kg in April. This is weak against the five-year average of $14.12/kg, however, the gap between the two values is less than it was a month ago, indicating venison exports are trading with greater stability into global markets. Export values have been firming since December and while values have been soft compared to 2020, if they can remain steady to rising through autumn and winter, the industry will be in a better position to capitalise on reliable demand this spring.
Last month, the venison leaderboard was much changed from a year ago. Exports increased by over 100 tonnes and the US, Netherlands, and China took over 60 percent of exports. This is indicative of the role Covid-19 continues to play in market dynamics, as countries maintaining a lower rate of infection can exercise higher demand.