AgriHQ report for week starting April 1, 2019

LAMB

The latest export value statistics are now available, and we can see that the average export value for lamb in February was $10.31/kg. This is 61c/kg above February last year.

Compared to last year, the average export value of frozen bone-in lamb increased by 82c/kg ($8.58/kg). Chilled bone-in lamb cuts traded for an extra 33c/kg this February, averaging $11.24/kg.

One thing to note when looking at this figure is that Easter occurred two weeks earlier last year. This means more of the Easter chilled production took place in January last year, compared to this year when production was February heavy.

So, we aren’t exactly comparing apples with apples. However, this February’s prices for chilled bone-in lamb cuts is also ahead of last January’s price ($10.83/kg) which suggests a reassuring upward price trend in this line of lamb product.

The boneless lamb products were a mixed bag when compared to last year’s values. The average export value ($11.81/kg) for frozen boneless lamb was 56c/kg ahead of last February. On the other hand, chilled boneless lamb product averaged $16.40/kg which was $1.06/kg less than February last year.

BEEF

A large increase in frozen beef coming into Japan has the potential to trigger the country’s tariff rate safeguard.

The ratification of the TPPA at the start of this year has created more favourable trading conditions for New Zealand, Canada and Mexico.

In January alone, Japan’s frozen beef exports (from all countries) increased by 13,000t (or 80 percent).

If this level of trading continues, the frozen beef safeguard (which comes into play if imports for a fiscal quarter exceed 17 percent on the previous year) will be triggered and those countries without an overriding trade agreement will be subjected to 50 percent tariff rates.

With four out of five of Japan’s major beef trading partners now immune from this particular safeguard, this only leaves the US (Japan’s second largest beef trading partner) out in the cold.

If the safeguard is triggered this quarter, it may leave the US facing 50 percent tariff rates on frozen beef from mid-2019 until April 2020. This could push up demand for New Zealand product.

FORESTRY

The latest wood harvesting and production data more or less confirms what everyone has already thought — that last year was the biggest year ever for forestry in New Zealand.

Assuming Q4 harvesting numbers released by MPI aren’t revised too significantly in the future, then 2018 saw the largest volume of wood harvested in New Zealand in a calendar year.

The latest numbers put roundwood removals at 36.09 million cubic metres, climbing 2.08 million cubic metres or 6 percent above the previous calendar year record set in 2017.

It’s been all action in the local scene the past six or so weeks.

A very dry January and February lifted harvesting rates to near maximum levels throughout the country, and they are only just beginning to tail off now autumn has arrived.

Even then the weather’s still been quite kind.

Heavier supplies haven’t had much impact on unpruned log markets.

Strong summer demand for timber within New Zealand has certainly helped, with anecdotal reports indicating mills are often performing better through Q1 versus 12 months ago.

Dry weather has kept construction rates up, with confidence within the local economy generating a bit more construction business, too.

LAMB

The latest export value statistics are now available, and we can see that the average export value for lamb in February was $10.31/kg. This is 61c/kg above February last year.

Compared to last year, the average export value of frozen bone-in lamb increased by 82c/kg ($8.58/kg). Chilled bone-in lamb cuts traded for an extra 33c/kg this February, averaging $11.24/kg.

One thing to note when looking at this figure is that Easter occurred two weeks earlier last year. This means more of the Easter chilled production took place in January last year, compared to this year when production was February heavy.

So, we aren’t exactly comparing apples with apples. However, this February’s prices for chilled bone-in lamb cuts is also ahead of last January’s price ($10.83/kg) which suggests a reassuring upward price trend in this line of lamb product.

The boneless lamb products were a mixed bag when compared to last year’s values. The average export value ($11.81/kg) for frozen boneless lamb was 56c/kg ahead of last February. On the other hand, chilled boneless lamb product averaged $16.40/kg which was $1.06/kg less than February last year.

BEEF

A large increase in frozen beef coming into Japan has the potential to trigger the country’s tariff rate safeguard.

The ratification of the TPPA at the start of this year has created more favourable trading conditions for New Zealand, Canada and Mexico.

In January alone, Japan’s frozen beef exports (from all countries) increased by 13,000t (or 80 percent).

If this level of trading continues, the frozen beef safeguard (which comes into play if imports for a fiscal quarter exceed 17 percent on the previous year) will be triggered and those countries without an overriding trade agreement will be subjected to 50 percent tariff rates.

With four out of five of Japan’s major beef trading partners now immune from this particular safeguard, this only leaves the US (Japan’s second largest beef trading partner) out in the cold.

If the safeguard is triggered this quarter, it may leave the US facing 50 percent tariff rates on frozen beef from mid-2019 until April 2020. This could push up demand for New Zealand product.

FORESTRY

The latest wood harvesting and production data more or less confirms what everyone has already thought — that last year was the biggest year ever for forestry in New Zealand.

Assuming Q4 harvesting numbers released by MPI aren’t revised too significantly in the future, then 2018 saw the largest volume of wood harvested in New Zealand in a calendar year.

The latest numbers put roundwood removals at 36.09 million cubic metres, climbing 2.08 million cubic metres or 6 percent above the previous calendar year record set in 2017.

It’s been all action in the local scene the past six or so weeks.

A very dry January and February lifted harvesting rates to near maximum levels throughout the country, and they are only just beginning to tail off now autumn has arrived.

Even then the weather’s still been quite kind.

Heavier supplies haven’t had much impact on unpruned log markets.

Strong summer demand for timber within New Zealand has certainly helped, with anecdotal reports indicating mills are often performing better through Q1 versus 12 months ago.

Dry weather has kept construction rates up, with confidence within the local economy generating a bit more construction business, too.

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