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AgriHQ report August 2

LAMB

It has been a whirlwind ride for lamb prices this winter.

Farmgate prices have lifted by $1.50/kg over the last ten weeks compared with the usual increase of just 60c/kg.

The reopening of the foodservice sector in key markets combined with tight pipeline supplies of lamb have led to a solid pricing recovery for New Zealand lamb.

Tighter lamb supplies domestically are also creating an urgency overseas to secure New Zealand lamb.

Slaughter rates here have slumped since June. Current data shows both islands recorded weekly lamb kills below 100,000 head into early July, a significant reduction when aligned with previous years.

While the volume of New Zealand lamb shipped in recent months has held, the value attained for our products has been exceptional.

After bottoming out in March, average export values for New Zealand lamb have continued to lift month-on-month. The latest data to the end of June showed values had lifted to $10.98/kg, the highest June value recorded, surpassing the previous record hit in 2019 by over 40c/kg.

BEEF

The stream of prime cattle to processors has been thick and fast this season.

As of week 39 (end July 3), the New Zealand seasonal prime kill hit 960,000 head, a 15 percent lift against 2020 throughput and 19 percent up on the five-year average.

The higher North Island slaughter rates accounted for 69 percent of national prime cattle kill to week 39 of the export season.

Initially, processors were fretting there would be a severe drop in prime supply this season due to industry expectations of a high heifer kill during last year's drought.

However, a heightened kill in the winter period last year can be attributed to a redistribution of stock due to lockdown in autumn, rather than an actual spike.

WOOL

New Zealand wool markets continue to go through a mini resurgence.

Crossbred wool indicators from the major wool reporters all lifted close to $3/kg clean after the South Island auction last week.

The last time prices were this high was mid-2019.

Both European and Indian buyers have been the more active of the major traders these past few weeks, seeking out better-quality fleeces in particular.

At the South Island auction, this has meant good-quality fleeces have lifted in value by 60-70c/kg clean in the past six weeks, whereas poor-quality types have come up only 35-40c/kg in the same period.

These buyers have been reported as trying to cover forward orders.

However, China has remained relatively absent compared to usual.

Clearance rates have held above 90 percent throughout July. Volumes offered do often button off through August, usually by a margin of about 10 percent, as farmers prepare for lambing. And this may be fuelling some minor urgency around short-term buying.