The price of topside and strip loin increased by 2.6% and 0.8% respectively week on week. The price of rump, chuck and brisket decreased by 1.4%, 2.8% and 1.9% respectively week on week. In New Zealand, the activity on export beef markets has died off as news of the coronavirus in China spread. Some New Zealand suppliers find themselves with stocks, due to major processing backlogs and a disrupted Chinese supply chain.
South Africa-
Beef: Week on week, beef prices were higher in the different classes. The average Class A price increased by 1.7% to R46.18/kg and Class C prices moved 0.5% higher to R40.19/kg week on week. A large part of the summer grain-growing region received good rains over the past weekend. This was a critical time for the maize crop. The western regions, like Bultfontein and Hoopstad still need rain. Looking at the current maize conditions, the country may have an above average crop. According to forecasters, the probability of more follow up rains in the next few weeks is high, which bodes well for the summer crop. Feed costs is expected to be lowered on the back of increased summer grains and oilseeds. Consumer demand is still constrained, however prices have picked up for weaner calves due to a small supplies available
Mutton: The largest part of the Northern Cape remains dry. West of Kimberley and south of the Orange River is still dry too. Grazing remains an on-going concern. Follow-up rains remains critical especially with veldt conditions that needs to recover. The long-term outlook however is positive. The Northern Cape’s traditional rain season is from Feb-Apr, and according to the latest weather forecast, some rains are expected around March. The Eastern Cape also received good rains over the past weekend.
Pork: The local pork prices traded mostly negative this week. The average porker price is 1.0% lower at R26.58/kg, while the average baconer price declined by 0.3% to R25.00/kg. The average cutters prices were 0.5% lower at R25.25/kg and the
Beef market trends
International beef market
Prices in the international beef market traded mostly negative this week. The price of topside and strip loin increased by 2.6% and 0.8% respectively week on week. The price of rump, chuck and brisket decreased by 1.4%, 2.8% and 1.9% respectively week on week. In New Zealand, the activity on export beef markets have died off as news of the coronavirus in China spread. Some New Zealand suppliers find themselves with stocks, due to major processing backlogs and a disrupted Chinese supply chain.
Local beef market
Week on week, beef prices were higher in the different classes. The average Class A price increased by 1.7% to R46.18/kg and Class C prices moved 0.5% higher to R40.19/kg week on week. A large part of the summer grain-growing region received good rains over the past weekend. This was a critical time for the maize crop. The western regions, like Bultfontein and Hoopstad still need rain. Looking at the current maize conditions, the country may have an above average crop. According to forecasters, the probability of more follow up rains in the next few weeks is high, which bodes well for the summer crop. Feed costs is expected to be lowered on the back of increased summer grains and oilseeds. Consumer demand is still constrained, however prices have picked up for weaner calves due to a small supplies available.
Outlook
The longer-term global protein demand which depends on global economic growth and consumer preference is looking stable to strong. Locally, the closure of all auctions in South Africa amid the FMD outbreak continues to cause uncertainty and puts producers under strain. Local beef prices are expected to trade sideways from February.
Sheep meat market trends
International sheep meat market
The international price of lambs and ewes decreased by 2.4% and 6.4% respectively week on week. The price of mutton ribs increased by 8.8% while the price of shoulders declined by 0.9% week on week. The slowdown in China due to the coronavirus is still being assessed in the global lamb market. So far, the immediate ramifications aren't as severe as with mutton and beef. Lamb sales are still taking place in China, in spite of the uncertainty around the coronavirus.
Local sheep meat market
This week, lamb and mutton prices traded mixed when compared to the previous week. The national average Class A carcass lamb price increased by 1.9% to R72.52/kg and the average Class C carcass price decreased by 5.4% to R50.89/kg. The price of merino skins remained unchanged at R47.50/skin this week. The Dorper skin price was up by 0.8% week on week at R33.47/skin. Compared to a year ago the price of dorper skins is 29.6% higher and the price of merino skins is 23.40% lower. The largest part of the Northern Cape remains dry. West of Kimberley and south of the Orange River is still dry too. Grazing remains an on-going concern. Follow-up rains remains critical especially with veldt conditions that needs to recover. The long-term outlook however is positive. The Northern Cape's traditional rain season is from Feb-Apr, and according to the latest weather forecast, some rains are expected around March. The Eastern Cape also received good rains over the past weekend.
Outlook
Looking forward, the reduced sheep flock in New-Zealand and Australia and strong demand from China is likely to keep global lamb prices supported in 2020. Locally, lamb and mutton prices remain subdued due to the availability of cheaper protein alternatives. Prices are expected to trade sideways to lower according to seasonality.
Pork market trends
International pork market
The international pork market traded lower this week with the US pork carcass price, US loin, US rib price and US ham price down by 10.9%, 5.0%, 2.3% and 13.1% respectively week on week. The import parity price for pork ribs decreased by 0.5% and the import parity price of ham decreased by 8.2% week on week. In Brazil, the ASF's impact on global pork production gave rise to international export opportunities for Brazilian pork producers. The US is to focus on aggressive growth strategies for pork, as pork exports set new records in 2019. The increased production may add a bearish tone to prices.
Local pork market
The local pork prices traded mostly negative this week. The average porker price is 1.0% lower at R26.58/kg, while the average baconer price declined by 0.3% to R25.00/kg. The average cutters prices were 0.5% lower at R25.25/kg and the average heavy baconer price was 0.3% lower at R23.91/kg. The sausage price was 0.8% higher at R18.50/kg. Lower pork imports into the country supported prices from December 2019 to February 2020. The number of pigs slaughtered in November 2019 amounts to 264,592 this represents a 4.0% decline month on month from 275,482 head of pig slaughtered in October 2019 and a 0.7% (266,538 pigs) decline in pigs slaughtered in November 2018.
Outlook
The Brexit trade-deal negotiation, ongoing US/China tensions and ASF will continue to cause EU production and trade uncertainties in 2020. The coronavirus situation is uncertain and disruptive, but it hasn't dampened the potential increase in exports from the US to China. Locally, pork prices are expected to follow beef and mutton prices lower according to seasonality. Pork remains among the cheaper protein alternatives available on the shelves, which usually attracts consumer uptake.
Poultry market trends
International poultry market
The international poultry prices traded mostly lower this week. The price of US whole birds decreased by 3.3% week on week. The price of US chicken breast declined by 16.2% week on week. The price of fresh MDM increased by 0.8% and the price of frozen MDM decreased by 1.1% week on week. Compared to a year ago the price of US whole birds and US chicken breasts are lower by 5.9% and 32.6% respectively. The price of US leg quarters decreased by 7.9% and the price of EU leg quarters increased by 2.5% week on week. Compared to a year ago the price of US leg quarters are 8.9% higher and the price of EU leg quarters are 28.7% higher. Improved beef prices, the main substitute for fresh poultry, may have a negative effect on global whole-bird and breast-meat markets will remain pressured and have limited price increase potential in Q1 of 2020. The global average feed costs driven by increased global supplies of soya beans and corn is limiting the increase in the poultry price.
Local poultry market
The average poultry prices were higher this past week. The average price for frozen birds increased by 2.1% to R26.62/kg, the average prices for fresh whole birds increased by 1.5% to R28.20/kg and IQF poultry prices were higher by 1.6% at R24.63/kg week on week. South Africa will potentially have a very big maize crop, that could put downward pressure on feed prices and in so doing reduce imports. Avian influenza has broken out in Poland, a big exporter to RSA, as a result all poultry imports from Poland have been banned. Another bullish factor is the avian influenza outbreak in China which will likely lead to a global shortage of chicken. The shortage may prompt increases in poultry prices, which could negatively impact imports of poultry into South Africa.
Outlook
Global feed prices are expected to be lower on the back of bumper soybean crops in South America. China's coronavirus outbreaks continue to hamper imports and exports into the country, limiting poultry uptake from other regions. Locally, lower priced poultry products are expected to encourage uptake when compared to other pricier meat types. Prices tend to increase from February onwards according to seasonality. The outlook on poultry is bullish, supported by lower grain prices, a potential amendment to the import tariff and a suspension of imports from one of the largest importing countries.
Hide market trends
Local hide market
The current average hide price is R1.36/kg, this is 1.1% lower than last week's price of R1.38/kg.
Outlook
The current price is 3.7% lower than prices were a month ago and is 53.8% lower than prices were a year ago. The local and global hide market remains under pressure. Chinese buying continues to be low amid the coronavirus outbreak. According to sources, most of the winter inputs from China have already arrived in SA before the outbreak, however the shipments that were scheduled after the Chinese New Year, remain an uncertainty.
