The price of topside and striploin declined by 5.4% and 3.9% respectively week on week. The price of rump, chuck and brisket increased by 1.5%, 4.7% and 3.4% respectively. Beef supplies are tight in the global market. The US is expected to produce record-large supplies in 2020, which will place the country in a supply advantage. Both international and domestic demand for US beef is strong and there is potential for growth once the US-Japan trade agreement is implemented. Australian beef exports for 2019 is at record levels despite their national herd reaching a record low of 26 million head. The drought still plagues Australian farmers. Producers continue to cull their herds. With Australian farmers financially stretched by the ongoing drought, it will be a challenge to finance herd rebuilding when the pasture returns.
In the local beef market this week, prices of class A remianed stable while prices of class C declined by 0.4% week on week. There's little movement in the cattle market and prices remain fairly stable. Producers hope to see a pick up closer to month- end. Weaner calf demand has been picking up the last two weeks. According to the RMLA, during August 2019, an estimated 215,328 head of cattle were slaughtered. This is 5.6% lower head of cattle slaughtered (228,140) compared to the same period last year.
The US cattle price for 2019 is raised, driven by current price strength. It is expected that cattle prices will remain firm going into 2020. US beef
exports are raised on increased global demand. Locally cheaper alternative proteins such as pork and poultry are readily available. Consumers are under pressure and some may opt for cheaper meat types. This adds a bearish tone to beef prices. The market has been very quiet with beef prices remaining stable across all classes. Producers hope to see an uptick in prices closer to month-end due to an expected increase in consumption during the month-end period. Pasture conditions may improve if the seasonal rains materialize.
Beef: Locally cheaper alternative proteins such as pork and poultry are readily available. Consumers are under pressure and some may opt for cheaper meat types. This adds a bearish tone to beef prices. The market has been very quiet with beef prices remaining stable across all classes. Producers hope to see an uptick in prices closer to month-end due to an expected increase in consumption during the month-end period. Pasture conditions may improve if the seasonal rains materialize.
Mutton: The Northern Cape and the Eastern Cape remain very dry, impacting grazing conditions negatively. Grazing conditions may improve if the seasonal rains materialize. Lamb and mutton remains the pricier meat on the shelves. With consumers currently under strain, the demand for lamb and mutton may be limited. Producers hope that demand will pick up ahead of the festive season. According to the RMLA, during August 2019, an estimated 373,278 head of sheep were slaughtered. This is 1.1% higher head of sheep slaughtered (369,126) compared to the same period last year, due to the ongoing drought.
Pork: Local pork prices traded sideways this week with the porker price increasing marginally by 0.3% and baconer price remaining stable. According to the RMLA, during August 2019, an estimated 253,164 head of pigs were slaughtered. This is 5.6% lower head of pigs slaughtered compared to the same period last year. According to SAPPO export increased by 18% month on month, 57% of the exports is destined for BLNS countries. Imports decreased by 5% month on month.
Poultry: China is the best performing poultry country, with very high poultry prices due to the shift from pork to poultry because of the African Swine Fever (ASF) outbreak. This situation in China has, to date, had limited impact on global poultry markets, because China is not open to poultry imports. The key concerns are the ongoing oversupply situations in many global markets, like the EU, the US and South Africa. Only ASF affected China, Mexico and Brazil (because of improved demand and reduced supplies) are performing well.
Hides: The current price is 21.4% higher than prices were a month ago, however, the hide price is 62.8% lower than prices were a year ago. Prices remain weak locally and globally. Unfortunately the hide market situation continues to remain very much stagnant.
The international price of ewes increased marginally by 0.4% week on week while the price of lambs remained unchanged. The price of mutton ribs increased by 0.8% week on week while the price of mutton shoulders increased by 5.7% week on week. Strong Chinese demand for New Zealand lamb continues to support current lamb prices and profit margins. Australian lamb and mutton exports are forecast to decline due to lower production. However, the proportion of lamb and mutton that will be exported is expected to continue to increase, because demand is expected to remain high in all of Australia’s major export markets.
In the local market this week the price for class A and class C increased by 4.2% and 2.0% respectively while the price for feeder lambs decreased by 0.5% week on week. The current price of feeder lambs is 24.7% lower than prices were a year ago. The price for dorper skins remained unchanged at R23.33/skin and merino skins remained unchanged at R39.29/skin this week. Compared to a year ago the price of dorper skins is 23.66% lower and the price of merino skins is 58.64% lower. The Northern Cape and the Eastern Cape remain very dry, impacting grazing conditions negatively. Grazing conditions may improve if the seasonal rains materialize. Lamb and mutton remains the pricier meat on the shelves. With consumers currently under strain, the demand for lamb and mutton may be limited. Producers hope that demand will pick up ahead of the festive season. According to the RMLA, during August 2019, an estimated 373,278 head of sheep were slaughtered. This is 1.1% higher head of sheep slaughtered (369,126) compared to the same period last year, due to the ongoing drought.
Australian producers are expected to rebuild flocks in 2019/20 to take advantage of ongoing higher lamb, mutton and wool prices. However, seasonal weather conditions are expected to remain mixed across eastern Australia .This could limit the capacity and ability for farmers to rebuild their flock. Locally prices remain subdued due to limited demand. However as the festive season approaches, prices could be supported in the short to medium term.
The international pork market traded positively this week with the US pork carcass price increasing by 4.3%. Week on week prices for loin, ribs and ham increased by 0.2%, 1.0% and 0.2% respectively. The import parity for pork ribs increased by 2.3% and the import parity of ham increased by 1.6% week on week. Pork prices remain high in China. According to the latest USDA report, the US pork production is forecast higher. The expected growth in pigs per litter is set to lead to increased availability of slaughter hogs in 2020. Currently the increased US production is pulling prices down, because the China uptake has not yet materialized.
Pork prices traded sideways this week with the porker price increasing marginally by 0.3% and baconer price remaining stable. According to the RMLA, during August 2019, an estimated 253,164 head of pigs were slaughtered. This is 5.6% lower head of pigs slaughtered compared to the same period last year. According to SAPPO exports increased by 18% month on month, 57% of the exports is destined for BLNS countries. Imports decreased by 5% month on month.
The forecasts for US hog prices have been reduced for 2019 and 2022 due to larger supplies and slow demand from China. Locally prices are expected to increase supported by increased consumer uptake ahead of the festive season. This trend is set to continue according to seasonality.
The international poultry market traded mixed this week. The price of US whole birds increased by 1.4% while the price of fresh MDM and frozen MDM decreased by 1.0% and 1.1% respectively. Compared to a year ago the price of US whole birds and US chicken breasts are 1.2% and 17.6% lower respectively. Global breast meat markets are oversupplied and causing prices in Brazil, the EU and US to stay low. The price of leg quarters in the US increased by 1.0% and the price of EU leg quarters increased by 0.5% week on week. Compared to a year ago the price of leg quarters for the US and the EU are 6.1% and 4.5% higher respectively. China is the best performing poultry country, with very high poultry prices due to the shift from pork to poultry because of the African Swine Fever (ASF) outbreak. This situation in China has, to date, had limited impact on global poultry markets, because China is not especially open to poultry imports. The key concerns are the ongoing oversupply situations in many global markets, like the EU, the US and South Africa. Only ASF affected China, Mexico and Brazil (because of improved demand and reduced supplies) are performing well.
This week local poultry prices traded mostly positive. The domestic poultry prices are trading sideways in the short term. Prices are expected to find support from better demand as poultry remains a cheaper option to beef, lamb and mutton, especially closer to month-end and during the festive season.
The US 2019 broiler price forecast has been raised due to recent price strength in the broiler market and increased demand. However, 2020 broiler price is forecasted to decline due to expected increase of broiler meat supplies. Chinese poultry prices are expected to stay bullish. According to the latest Rabobank statistics, Chinese pork production is expected to drop by at least 25% in 2019. Chinese poultry prices are expected to remain supported on substitution effects, intensified by the limited availability of pork breeding stock and limited trade access for potential pork exporters. Locally prices are expected to improve due to increased demand ahead and during the festive season based on seasonal trends. However because consumers remain under pressure, price increases will be limited.
The current average hide price is R1.86/kg, this is 4.3% higher than last week’s price of R1.78/kg. The current price is 21.4% higher than prices were a month ago, however, the hide price is 62.8% lower than prices were a year ago. Prices remain weak locally and globally. Unfortunately the hide market situation continues to remain very much stagnant.
