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AGRITrends- Livestock South Africa November 2019

Beef: Week on week, beef prices traded mostly positive across the different classes. The average Class A price was 0.9% higher at R44.01/kg and Class C prices moved 1.2% higher at R37.01/kg week on week. The average weaner calf prices traded 3.7% lower at R26.27/kg compared to the previous week. The demand for weaners is slow at the feedlots amid the uncertainty since the latest FMD outbreak. Demand for beef picked up this week driven by month-end increased consumption.

Mutton: This week, lamb and mutton prices traded mostly positive when compared to the previous week. Higher local demand supported sheep meat prices. The national average Class A carcass lamb prices increased by 3.2% to R63.84/kg and the average Class C carcass prices increased by 5.1% to R47.08/kg. The average price for feeder lambs decreased by 3.2% to R31.04/kg this week. The price of merino skins increased by 6.6% to R19.44/skin this week. The Dorper price was higher week on week at R21.56/skin. Compared to a year ago the price of Dorper skins is 29.45% lower and the price of merino skins is 51.88% lower.

Pork: The local pork prices traded lower across all categories this week due to subdued demand. The average porker price is 0.3% lower at R28.33/kg, while the average baconer price declined by 1.5% to R26.78/kg. The average cutters prices were 2.3% lower at R27.04/kg and the average heavy price was 2.3% lower at R25.96/kg. The sausage price was 2.1% lower at R20.85/kg. Locally, pork prices are supported by strong demand because pork and poultry remain the relatively cheaper protein alternatives. It is expected that prices will be supported by increased consumer demand during the festive holiday.

Poultry: The average poultry prices traded positively this past week. The average price for frozen birds increased by 0.6% to R26.62/kg, the average prices for fresh whole birds increased by 0.9% to R28.20/kg and IQF poultry prices were up 0.2% to R24.49/kg week on week. Supplies are low in the market this week which is supporting prices. An uptick in demand has been reported and the industry is hopeful that prices will be supported from this weekend till the festive period. Prices of fillet cuts have been coming down as expected, as the middle class to low income earners demand more of the cheaper IQF products especially during this period.

Hides: The current average hide price is R1.65/skin. The current price is 0.3% lower than prices were a month ago and the current hide price is 58.0% lower than prices were a year ago. The hide market remains under immense pressure. Abundant supplies continue to weigh down the global and local market.

Prices in the international beef market were mixed this week. The price of topside, rump and brisket decreased by 3.4%, 7.5% and 3.6% respectively week on week. The price of striploin remained unchanged at US$480/cwt. The price of US chuck increased by 11.1% week on week. Strong global demand will continue to support cattle prices. The growing demand from the Chinese market has attracted more volumes of beef trimmings from Australia and New Zealand during 2019, this trend is expected to continue in 2020.

Week on week, beef prices traded mostly positive across the different classes. The average Class A price was 0.9% higher at R44.01/kg and Class C prices moved 1.2% higher at R37.01/kg week on week. The average weaner calf prices traded 3.7% lower at R26.27/kg compared to the previous week. The demand for weaners is slow at the feedlots amid the uncertainty since the latest FMD outbreak. Demand for beef picked up this week driven by month-end increased consumption.

It is expected that US cattle prices will remain firm going into 2020 due to increased global demand. Due to the smaller livestock inventories in Australia. The 2020 Australian beef production is estimated to be lower but prices are expected to be favourable. Locally, prices have been under pressure due to a lack of demand. The impact that the FMD outbreak will have is still uncertain. Local beef prices may remain subdued in line with seasonal trends. However there's normally improved demand during the month end period and going into the festive season.

The international price of ewes increased by 1.6% week on week while the price of lambs remained unchanged week on week. The price of mutton ribs increased by 2.6% week on week while the price of mutton shoulders remained unchanged week on week. Tight livestock inventories, in Australia will see beef production down and sheep meat production stable in 2020, supporting prices for both sheep and beef. The New Zealand beef and sheep meat production is expected to rise.

This week, lamb and mutton prices traded mostly positive when compared to the previous week. Higher local demand supported sheep meat prices. The national average Class A carcass lamb prices increased by 3.2% to R63.84/kg and the average Class C carcass prices increased by 5.1% to R47.08/kg. The average price for feeder lambs decreased by 3.2% to R31.04/kg this week. The price of merino skins increased by 6.6% to R19.44/skin this week. The Dorper price was higher week on week at R21.56/skin. Compared to a year ago the price of dorper skins is 29.45% lower and the price of merino skins is 51.88% lower.

Global beef and lamb prices are expected to be supported in 2020 due to lower inventories in the major producing countries. Locally, lamb and mutton prices remain subdued due to the availability of cheaper protein alternatives such as pork and poultry, which add a bearish tone to sheep meat prices, prices are expected to trade sideways even during the usual "high consumption period" in December.

The international pork market traded mixed this week with the US pork carcass price and US ham prices lower by 4.0% and 7.2% respectively week on week. The import parity for pork ribs decreased by 0.3% and the import parity of ham decreased by 6.6% week on week. The US consumers are known to consume more pork during the Christmas season which is expected to support prices.

The local pork prices traded lower across all categories this week due to subdued demand. The average porker price is 0.3% lower at R28.33/kg, while the average baconer price declined by 1.5% to R26.78/kg. The average cutters prices were 2.3% lower at R27.04/kg and the average heavy price was 2.3% lower at R25.96/kg. The sausage price was 2.1% lower at R20.85/kg.

Global: Prices are expected to be high for hogs in 2020 due to strong global demand. Locally, pork prices are supported by strong demand because pork and poultry remain the relatively cheaper protein alternatives. It is expected that prices will be supported by increased consumer demand during the festive holiday.

The international poultry price traded mostly negative this week. The price of US whole birds decreased by 1.7% and the price of fresh MDM decreased by 0.8% while the price of frozen MDM decreased by 1.9% week on week. Compared to a year ago the price of US whole birds and US chicken breasts are11.6% and 11.4% lower respectively. The price of leg quarters in the US decreased by 0.6% and the price of EU leg quarters increased by 0.1% week on week. Compared to a year ago the price of leg quarters for the US are 4.2% higher and the price of EU leg quarters are 12.8% higher. Chicken breast prices in the US remain under pressure due to lower demand and heavy supplies. Poultry production is expected to rise strongly in
2020, partly in response to ASF in South East Asia.

The average poultry prices traded positively this past week. The average price for frozen birds increased by 0.6% to R26.62/kg, the average prices for fresh whole birds increased by 0.9% to R28.20/kg and IQF poultry prices were up 0.2% to R24.49/kg week on week. Supplies are low in the market this week which is supporting prices. An uptick in demand has been reported and the industry is hopeful that prices will be supported from this weekend till the festive period. Prices of fillet cuts have been coming down as expected, as the middle class to low income earners demand more of the cheaper IQF products especially during this period.

International: The global supplies of animal proteins was significantly reduced in 2019 due to the ASF outbreak. Poultry production is set to rise in Europe, driven by export opportunities. Locally poultry remains a cheaper protein alternative compared to the other meat types. Stakeholders in the poultry industry hope for seasonal trends to support demand.

The current average hide price is R1.65/kg, this is 0.6% higher than last week’s price of R1.64/kg.

The current price is 0.3% lower than prices were a month ago and the current hide price is 58.0% lower than prices were a year ago. The hide market remains under immense pressure. Abundant supplies continue to weigh down the global and local market. NB* Hide prices are determined as the average of the RMAA (Red Meat Abattoir Association) prices and prices of independent companies.


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