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AGRI TRENDS -Local prices trend downwards week-on-week- South Africa

Domestic beef prices moved marginally negative this week with Class A prices down 0.01%, Class C prices down 0.3% and weaner calf prices down 0.6%. Class C prices are expected to increase from June which is in line with seasonal trends as demand for Class C beef increases in winter months.

Mutton: New Zealand lamb prices increased by 1.1% week-on-week while the Ewe prices remained the same as last week. The domestic prices of class A increased by 0.8% week-on-week while the prices of class C and feeder lambs declined by 0.2% and 1.5% respectively.   In line with seasonal trends as demand increases in winter months, the price of Class C meat is expected to increase from the end of May.

Pork: Week-on-week the US pork carcass and loin prices traded downwards by 1.2% however US carcass prices are up by 25.9% compared to a year ago. The domestic pork market had a mixed trade this week with porker prices increasing by 0.7% but Baconer prices declining by 0.4% week-on-week. The number of animals slaughtered this week was 1.7% higher than last week. Domestic prices are expected to remain fairly stable in the next three months.

Poultry: The price of US whole birds increased by 3.3% this week while the price of breast meat has remained the same week-on-week and has returned to the same price received a month ago. Fresh MDM declined by 2.3% while frozen MDM increase by 1.2% week-on-week. birds.
Local prices for whole birds, both fresh and frozen, increased slightly week-on-week with prices of fresh birds increasing by 0.1% and prices of frozen birds increasing by 0.2%. Week-on-week the price of IQF declined by 1.8%. Prices for whole frozen chicken are expected to increase from June while prices of whole fresh chicken and Individually Quick Frozen are expected to follow a declining trend in the next three months.

Hides: Local hide prices increase by 1.82% week-on-week. Year-on-year the average hide price has declined by 77%.

Week-on-week US prices for rump, striploin and brisket increased by 2.1%, 6.3% and 0.3% respectively. US Chuck prices experienced the largest price decline this week decreasing by 6.1% compared to last week. Year-on-year all US prices increased, except for US topside which declined by 3.7%. New Zealand cow prices declined by 0.3% week-on-week while steer prices remained the same as last week. Spill over demand from the hog market is expected to result in increased demand for the US beef market which would rally prices upwards.

Domestic beef prices moved marginally negative this week with Class A prices down 0.01% and Class C prices down 0.3%. Weaner calf prices declined by 0.6% week-on-week while the contract prices remained the same as last week. The New Zealand carcass equivalent increased by 0.8% week-on-week. There were no trade figures reported by AMIE for the week.

Domestically, class A beef prices are expected to remain fairly stable in the next three months with prices dropping off in June. Class C prices are expected to increase from June which is in line with seasonal trends as demand for Class C beef increases in winter months. Internationally, markets are hoping for increased prices following increased demand due to grilling season as well as the spillover demand from the hog market.

New Zealand lamb prices increased by 1.1% week-on-week while the Ewe prices remained the same as last week. The import parity for lamb and ewe increased by 2.1%and 1.1% respectively. There were no trade figures reported for neither mutton ribs nor mutton shoulders this week. New Zealand has reported that the strong demand for frozen cuts has kept the estimated average export value (across all cuts) as strong as last year.

The number of animals slaughtered this week is 17.5% lower than last week's slaughterings. The domestic prices of class A increased by 0.8% week-onweek while the prices of class C and feeder lambs declined by 0.2% and 1.5% respectively. The price of dorper skins increased by 1.5% week-on-week to R33/kg.

In line with seasonal trends as demand increases in winter months, the price of Class C meat is expected to increase from the end of May. Class A prices are expected to follow the same trend with prices remaining fairly stable before increasing from June as demand increases. International prices are expected to continue experiencing soft demand for loins driven by strong European inventories, continued demand for frozen cuts will hopefully continue to support the market.

There is increased participation in the US hog market due to expectations of increased demand and a surge in prices. Week-on-week the US pork carcass and loin prices traded downwards by 1.2% however US carcass prices are up by 25.9% compared to a year ago. Prices of ribs and ham are up by 4.9% and 6.2% respectively and the import parities of ribs and ham also increased week-on-week. All US pork prices are up year-on-year. Following the outbreak of African Swine Fever in China the US/China trade negotiations may be concluded sooner than expected which is creating hope in the market for increased export demand.

The domestic pork market had a mixed trade this week with porker prices increasing by 0.7% but baconer prices declining by 0.4% week-on-week. The number of animals slaughtered this week was 1.7% higher than last week and is 66.2% more than a year ago. There were no trade figures reported by AMIE this week. Although the African Swine Fever outbreak on one farm in the Delmas area in mid-April is fully under control and not a cause for alarm; SAPPO have advised pork producers to be extra vigalent regarding biosecurity protocols.

The price of US whole birds increased by 3.3% this week while the price of breast meat has remained the same week-on-week and has returned to the same price received a month ago. Fresh MDM declined by 2.3% while frozen MDM increase by 1.2% week-on-week. The price of US leg quarters increased by 1.4%; no trade figures were reported by AMIE for the EU leg quarters so a comparison between US and EU cannot be made. Spill over demand from high market caused by the African Swine Fever outbreak in China is expected to support an increase in international poultry prices.

Local prices for whole birds, both fresh and frozen, increased slightly week-on-week with prices of fresh birds increasing by 0.1% and prices of frozen birds increasing by 0.2%. Week-on-week the price of IQF declined by 1.8%. Locally there seems to be an increased demand for fresh products which is driving up prices slightly.

In the domestic markets prices are expected to follow the seasonal trends. Prices for whole frozen chicken are expected to increase from June while prices of whole fresh chicken and Individually Quick Frozen are expected to follow a declining trend in the next three months. The African Swine Fever outbreak in China is expected to trigger global price increase across all meat markets which will hopefully support the local prices.

Local hide prices increase by 1.82% week-on-week with the RMAA feedlot hide price increasing by 5.9% and the field hide price increasing by 2.7%. Year-on-year the average hide price has declined by 77% from R7.89/kg to R1.82/kg.

The demand for leather is remaining stubbornly low although slaughter numbers are increasing globally. Prices are expected to remain low however the market is hopeful that the recent slight increase in prices could be a turning point for the industry.

Notes on data used
Beef carcass prices: Class A: Weaner or A grade (0-18 months, Milk Teeth). Class C: (48 – 50 months, 8 Teeth). (Source: Red Meat Abattoir Association; beef carcass prices are a week delayed). Live weaner calf prices: Weaner (200-250kg) Average live weaner calf prices (Excluding VAT) at auctions and feedlot in the Northern Free State and auctions in the Central Free State (Bloemfontein) in the current week. AMIE carcass import parity price; wholesale delivered price of beef trimmings 80VL (Excluding VAT) (Source: Association of Meat Importers & Exporters; prices are a week delayed) Beef trimmings are pieces of meat remaining after steaks, roasts, and other cuts are removed. Beef trimmings are very often used to make ground beef. VL: Visual Lean ABSA AGRITRENDS


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