Analyst Intel Archives

Sarah Friel 

Deer farmers’ confidence has been damaged by market uncertainty.

While there are positive indications from export markets, which support glimmers of optimism in the industry, processors are still proceeding with caution regarding spring contracts.

Last week, the New Zealand stag farm gate price was $5.57/kg, about $3/kg below the five-year average. The market is $5.65/kg below this time in 2018, when the farm gate operated at $11.20/kg.

Unfortunately, Deer Industry NZ (DINZ) are not expecting a big turnaround for prices this September, when the market normally peaks for the traditional game season. Indications from processors suggest this season’s market peak will not be much different to year-ago levels.

Last year, the North Island farm gate peaked at $6.20/kg in September, while the South Island price tapped out at $6.65/kg in October. Limited volume contracts offered more to suppliers but were only slightly above $7/kg. For reference, the NZ five-year average peak for the spring market is $9.70/kg.

Prime cattle sales around the country used to be just as prominent as store sales, but as time moves on the need for separate sales to be held is coming under the spotlight.

Several yards already hold combined prime and store sales, which for buyers means just one trip to the yards each week and for sellers it means their cattle are presented to a larger audience – and that sentiment is one of the driving forces behind fewer prime-only cattle sales at Stortford Lodge this year.

In past years, the sheer volume of cattle offered over the two days meant a split sale was necessary.

Just 10 years ago, total prime volume for 2011 and 2012 at this yard was 5800 and 5500-head respectively. Volume has been on a downwards slope since then, though up until 2020 most years still recorded at least 2200 going through the rostrum.

In 2020, just over 1000 were offered for the year, but year-to-date only 57 cattle have been sold on Mondays over three sale days; one apiece in January, April and May.

AgriHQ analysts Nicola Dennis and Sarah Friel discuss last week's North Island and South Island Livestock Insight Reports, discussing the challenges shipping poses for the new season, supply of cattle and lambs to the processors, and some easing prices in the store market.

The North Island in-lamb ewe market has now been running for enough weeks to get a good gauge on this market. And going off the numbers, prices are about where they should be – at record levels.

Sale yards were jam-packed with sheep over the past two weeks as sellers looked to take advantage of the strong prices at auction for both store and prime stock. During the week of July 5-July 9, nearly 62,000 sheep passed through the main yards covered by LivestockEye reports, a level that trumped the previous weekly record for sheep sold in July, set in 2019, by over 8000 head.

AgriHQ analysts Nicola Dennis and Sarah Friel take a look back at last week's North Island and South Island Livestock Insight reports, discussing what implications higher beef production in the US has for NZ exports, strong prime prices in both islands and a plateau in store lamb prices.

What has been driving the above-average store lamb farm gate prices, which have steadily been climbing since May?

And, while the latest developments in the store lamb prices have been encouraging, it’s definitely not without a knock-on effect as high values will mean that good margins could be hard to achieve, especially if the flow of lambs to processors is impacted.

AgriHQ analysts Mel Croad, Reece Brick and Suz Bremner provide insight, perspective and analysis on the latest developments in lamb schedules and store lamb markets.

Those on the ground at Temuka reported one of the coldest sale days down at the yards, as a heavy frost and cold temperatures lingered throughout the day.

Changes in farm policies led a number of breeding ewes to the Temuka sale yards for the annual ewe fair, though volume continues to fall away year-on-year.

Fairs accommodating the scanned-in-lamb and run-with-ram lines have become a rarity in modern-day livestock trading in New Zealand and Temuka is one of few yards to still hold a standalone fair.

Lamb prices have increased by the largest degree ever seen for this time of the season. When any market breaks away from the norm, a level of concern starts to creep in and comparisons to previous highs are made. Often the focus lies with where it all went wrong, rather than the potential of a new trend developing.

Plenty of comparisons have been drawn with the current market and the heady heights lamb flew to in late-2019.