While the price of US striploin declined by 2.3% and the price for brisket increased by 6% compared to last week. The deal with Mexico sparked optimism in the market, which supported prices. The late start to grilling season in the US really set the futures market back and the market is still struggling to find direction. Increased US beef demand is expected for Fathers’ Day this weekend as well as for 4th of July celebrations, this should provide support for market prices. The high US corn prices is definitely going to impact feed costs for cattle farmers and put the market under pressure in the short term. A single case of BSE (“mad cow disease”) in Brazil has resulted in the suspension of exports of Brazilian beef to China. BSE occasionally occurs in older cattle as a side effect of ageing as is the case with this situation. Nevertheless, exports have been suspended as per the trade agreement. The situation is expected to be resolved quickly.
Beef: International beef prices were mixed this week. The high US corn prices is definitely going to impact feed costs for cattle farmers and
put the market under pressure in the short term. A single case of BSE (“mad cow disease”) in Brazil has resulted in the suspension of exports
of Brazilian beef to China. Increased maize prices have resulted in increased feed prices for cattle; this has had a negative impact on the domestic weaner calf prices as they dropped by 2.4% compared to last week.
Mutton: The New Zealand sheep meat market traded positively this week. Increased demand for New Zealand products has provided
support for prices as US and Chinese buyers compete for leg cuts with current New Zealand lamb leg prices trading at a premium. The domestic sheep market traded positively this week as seasonal demand for sheep meat increases as we move into winter months and
increased international prices supported local prices.
Pork: Increased corn and soya meal prices are expected to put the pork market under pressure in the short term as feed prices are impacted.
The G20 summit is to be held at the end of June, the market is hopeful that this will result in news regarding a conclusion to the US/China
trade negotiations. The domestic pork market experienced sharp increases in prices this week. This price increase is due to increased seasonal domestic demand as well as support from the increase in international pork prices.
Poultry: The US poultry market is under pressure at the moment due to the increased corn prices resulting in higher feed costs. The
domestic poultry market is under pressure in their Individually Quick Frozen sector as such prices for IQF dropped by 0.6% week-on-week.
Many processors have large stocks of IQF in storage and in order to move the stock are having to reduce prices – this is to the benefit of the
South African consumer.
Hides: The average hide price for the week ending 14 June 2019 is relatively stable with a slight decline of 0.15% in price compared to last
week. The domestic hide market is going to remain under pressure. The market is hopeful that prices have reached a bottom and will turn
around in the short term.
Increased maize prices have resulted in increased feed prices for cattle; this has had a negative impact on the domestic weaner calf prices as they dropped by 2.4% compared to last week. The price of class A and class C beef remained relatively stable this week with class A up 0.3% and class C down 0.7% week-on-week. Compared to a year ago, domestic beef prices are between 5% and 11% lower.
International volatility is expected for the remainder of the year. Sagging beef prices (compared to a year ago) are expected to continue due to the late start to the grilling season in the US as well as the increased feed costs. Higher demand in the US for specific events such as Fathers’ Day and 4th of July will hopefully provide additional support for US prices in the short term. Brazil is a large supplier of beef to the Chinese market. As the market is already speculating a large protein shortage in China due to ASF the suspension of exports of Brazilian beef to China is likely to add further concern. The domestic beef market is expected to remain under pressure in the short term due to the high maize prices increasing feed costs. Class C beef is expected to start increasing as we move into the winter season.
The New Zealand sheep meat market traded positively this week. Lamb prices moved up by 0.7% and ewe prices increased by 1.4% week-on-week. The import parity increased for both lambs and ewes by 3.2% and 3.7% respectively. Increased demand for New Zealand products has provided support for prices as US and Chinese buyers compete for leg cuts with current New Zealand lamb leg prices trading at a premium. Prices are above last year’s levels, mainly due to higher demand coming from the EU as they move into their summer months that will hopefully hold milder temperatures than last year’s heat wave summer temperatures. Prices for mutton shoulders and rib cuts increased by 1.5% and 3% respectively week-on-week.
The domestic sheep market traded positively this week as seasonal demand for sheep meat increases as we move into winter months and increased international prices supported local prices. High demand levels for feeder lambs resulted in an increase of 6.8% in price week-on-week with some buyer’s paying up to R40/kg for feeder lambs. Class A and class C prices increased by 2,8% and 0.5% week-on-week. The price for merino skins experienced a sharp drop in price this week as prices moved to R38.57/skin – this is 14.3% lower than the previous week’s price and almost 56% lower than the price received a year ago.
New Zealand prices for ewes and lambs are expected to continue along their increasing trend as demand levels in the export market are expected to remain high in the medium term. Increased international prices are expected to provide support for local prices. Seasonal trends indicate increased domestic demand for sheep meat products as we move into the winter season. Class C prices are expected to experience larger increases in the next month.
The US pork market was mixed this week with the pork carcass price remaining stable week-on-week. The price for loins and ham increased week-onweek by 3.6% and 5.7% respectively, these price increases have resulted in the ham price being almost 34% higher than prices a year ago. US pork ribs, however, experienced a 6.8% price drop this week. Increased corn and soya meal prices are expected to put the pork market under pressure in the short term as feed prices are impacted. The G20 summit is to be held at the end of June, the market is hopeful that this will result in news regarding a conclusion to the US/China trade negotiations. The deal that has been struck between the US and Mexico is good news for the market as it allows the US to export pork to Mexico, this news provided support for US pork prices this week.
The domestic pork market experienced sharp increases in prices this week. The porker price increased by 7.5% and the baconer price increased by 7.2% week-on-week. This price increase is due to increased seasonal domestic demand as well as support from the increase in international pork prices. The decline in US pork rib prices is good news for the South African consumer as SA imports ribs in order to meet the high levels of domestic demand.
The increases in US pork prices are hopefully an indication that the market is creating a bottom and prices will start to pick up from here. However, with no further news on the US/China tariff war as well as the continued speculation regarding the protein shortage in China the market is expecting continued volatility for the rest of the year. Domestic pork prices are expected to continue their increasing trend in the next two months and level off in August in line with seasonal expectations and last year’s trend. Increased international pork prices will also provide support for domestic prices.
The US poultry market is under pressure at the moment due to the increased corn prices resulting in higher feed costs. The price of whole birds
declined by 2.5% this week while the price of chicken breasts remained the same as the previous week. Year-on-year the price of whole birds is down by almost 20%. MDM prices increased week-on-week with the price of fresh MDM up by 0.9% and frozen MDM up by 1.2%. The price US leg quarters increased by 0.5% while the price of EU leg quarters increased by 4.5% week-on-week.
The domestic poultry market is under pressure in their Individually Quick Frozen sector as such prices for IQF dropped by 0.6% week-on-week. Many processors have large stocks of IQF in storage and in order to move the stock are having to reduce prices – this is to the benefit of the South African consumer. Mid-month consumer demand is low which is having an impact on current prices. The price of fresh whole birds increased by 0.6% while the price of frozen whole birds increased by 1.4% week-on-week. Demand for frozen products was higher than demand for fresh products this week. Producers are under pressure as increased maize prices is impacting feed costs.
The US poultry market is going to remain under pressure in the short term due to the higher grains prices impacting feed costs. The price of EU leg quarters is expected to continue increasing for the next month in line with seasonal trends. In the domestic market, poultry prices are expected to be under pressure in the short term due to increased feed costs. Domestic demand is expected to pick up slightly from next week as month end approaches.
The average hide price for the week ending 14 June 2019 is relatively stable with a slight decline of 0.15% in price compared to last
week. The RMAA hide prices were mixed this week – the price for field hides dropped by 1.3% while the price for feedlot hides increased
by 0.5% week-on-week.
In the three year period from June 2016 to June 2019 (current) the highest average hide price recorded was for the last week of
December 2016 at a price of R15.65/kg. The current average hide price of R1.69/kg is 89.2% lower than this high. The domestic hide
market is going to remain under pressure. The market is hopeful that prices have reached a bottom and will turn around in the short term.
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
