AgriHQ report April 8

LAMB

Store lambs have been trading at $3.50/kg in the North Island this week. When looking at the current farmgate price of $7.10/kg it shows that current store values are trading at 49 percent of schedule.

This has climbed from 44 percent a month ago and compares with 45 percent this time last year. Historically store lambs trade at 47 percent of schedule through April, which would suggest the store price should be more like $3.35/kg on, therefore current buyers are paying a premium for store lambs compared to five-year averages and the market this time last year.

A hot store market now invariably results in less of a margin when these lambs are finished. However, it is worth noting the relativity between store and slaughter prices does tend to drop back to 45 percent through June.

In the South Island the store lamb market appears to have less heat to it when compared to current farmgate prices.

Store prices this week have been tracking at 3.25/kg for a 32kg lamb. At a farmgate price of $6.70/kg it shows that current store values are trading at 48percent of schedule. This has climbed slightly from 47 percent last month but it is on par with last year and the five-year average.

This means that current store values are in line with expectations compared to where the farmgate price is sitting. The percentage of schedule on a historical sense remains at 48 percent of schedule through the winter months.

BEEF

Extensive rain in Queensland and New South Wales has brought 100-200mm to many Australian cattle farms. The grass has yet to grow, but the rain has begun to put a damper on heavy cattle kills.

The eastern states kill statistics show that 147,500 head of cattle were slaughtered last week. That is 3 percent below the week before, but still some 40,000 extra head compared to this time last year. Australian meat processors have already begun to lift schedule prices to maintain stock flows. In places, this has meant beef schedules have lifted AUD 40-60c/kg.

The shorter supply of Australian beef is likely to strengthen overseas markets particularly in the US, China and Japan.

Although it will take some time for feed levels to regenerate so heavy kills could continue for the next few weeks.

GRAIN

North Island maize silage harvest should be all but finished with yields being reported by industry as “fairly average” in some places which is largely due to the dry start to the year. Maize grain harvest now will be getting under way in the lower North Island with the expectation that it will be well under way by mid-April.

South Island cereal harvest is all but done with growers getting mixed yields and quality in their crops. Feed prices continue to remain steady, which defies what you would otherwise expect considering the upward trend in the farmgate milk price during the second half of the season.

This could in turn be a reflection of a shift in farmer spending towards a focus on debt reduction.Climatic conditions appear to be putting a handbrake on pasture growth rates for most of the country as indicated by NZX’s PGI graphs, which put growth rates for most regions well below the historical average. A warm end to April expected to follow the cooler than average start to the month to date.

LAMB

Store lambs have been trading at $3.50/kg in the North Island this week. When looking at the current farmgate price of $7.10/kg it shows that current store values are trading at 49 percent of schedule.

This has climbed from 44 percent a month ago and compares with 45 percent this time last year. Historically store lambs trade at 47 percent of schedule through April, which would suggest the store price should be more like $3.35/kg on, therefore current buyers are paying a premium for store lambs compared to five-year averages and the market this time last year.

A hot store market now invariably results in less of a margin when these lambs are finished. However, it is worth noting the relativity between store and slaughter prices does tend to drop back to 45 percent through June.

In the South Island the store lamb market appears to have less heat to it when compared to current farmgate prices.

Store prices this week have been tracking at 3.25/kg for a 32kg lamb. At a farmgate price of $6.70/kg it shows that current store values are trading at 48percent of schedule. This has climbed slightly from 47 percent last month but it is on par with last year and the five-year average.

This means that current store values are in line with expectations compared to where the farmgate price is sitting. The percentage of schedule on a historical sense remains at 48 percent of schedule through the winter months.

BEEF

Extensive rain in Queensland and New South Wales has brought 100-200mm to many Australian cattle farms. The grass has yet to grow, but the rain has begun to put a damper on heavy cattle kills.

The eastern states kill statistics show that 147,500 head of cattle were slaughtered last week. That is 3 percent below the week before, but still some 40,000 extra head compared to this time last year. Australian meat processors have already begun to lift schedule prices to maintain stock flows. In places, this has meant beef schedules have lifted AUD 40-60c/kg.

The shorter supply of Australian beef is likely to strengthen overseas markets particularly in the US, China and Japan.

Although it will take some time for feed levels to regenerate so heavy kills could continue for the next few weeks.

GRAIN

North Island maize silage harvest should be all but finished with yields being reported by industry as “fairly average” in some places which is largely due to the dry start to the year. Maize grain harvest now will be getting under way in the lower North Island with the expectation that it will be well under way by mid-April.

South Island cereal harvest is all but done with growers getting mixed yields and quality in their crops. Feed prices continue to remain steady, which defies what you would otherwise expect considering the upward trend in the farmgate milk price during the second half of the season.

This could in turn be a reflection of a shift in farmer spending towards a focus on debt reduction.Climatic conditions appear to be putting a handbrake on pasture growth rates for most of the country as indicated by NZX’s PGI graphs, which put growth rates for most regions well below the historical average. A warm end to April expected to follow the cooler than average start to the month to date.

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