AgriHQ report April 15

Lamb

There is a lot of daylight between lamb carcass weights this season and any other season in the AgriHQ database.

The season-to-date average hot carcass weight is 18.73kg, in the latest kill statistics. The next highest season is 2011/12 which is 18.2kg, 550g/lamb behind.

Due to favourable feed levels, the season started with an average hot carcass weight of just over 22kg, reflecting the larger volume of heavier old season lambs carried into October. This was a whole kilogram ahead of last season, which was a strong year.

Weekly carcass weights dropped briefly in line with last year’s weights during November and December when new season lambs began in earnest.

In recent weeks, the average provisional hot carcass weight has been trending about 600g/lamb above last year.

The latest lamb kill statistics show the number of lambs killed this season has caught up with last season and, with a higher average carcass weight, production will be ahead of last year — at least for now.

A downward trend is emerging in lamb carcass weights, particularly for the South Island. This supports anecdotal evidence that poor feed quality is challenging lamb yields in many areas.

Beef

The US grinding market is defying gravity at the moment, with grinding beef returns the highest they have been since 2015.

In the past month, the 95CL (bull) beef price has jumped up 65c/kg and is currently sitting at $7.90/kg.

The 90CL (cow) price has climbed 55c/kg and is $7.26/kg. Competitive tension with the growing Chinese grinding market is a key driver of this strong price.

Manufacturing beef exports to China have increased by 17,200t (up 211 percent) in the season to date, whereas manufacturing beef imports into the US have fallen by the same amount. US grinders are finding that they have to compete with Chinese demand for manufacturing beef in what would generally be New Zealand’s peak supply period.

Furthermore, the free trade agreement between China and NZ means that export conditions in the Chinese market are more favourable than in the US.

The “China factor” combined with a patchy New Zealand cow kill has meant that high US imported beef prices have been realised despite strong slaughter rates in Australia (up 26 percent for cattle this week compared to last year).

While the international market for manufacturing beef is strong, this has not been reflected in processor schedules.

The farm-gate operating price for bull beef has been at a five-year low and the AgriHQ bull procurement indicator has just about fallen off the bottom of the chart and is sitting at 61 to 65 percent of export earnings paid in bull procurement.

This week saw a small correction in bull farm operating prices, bringing the average up to $5.10/kg.

Wool

The coarse wool market has not changed a huge amount in the last month - 36-39 micron has sold in a range of $3.08-$3.19/kg clean, fine crossbred (32-33 micron) at $4.43-$5.47/kg clean.

A limited supply of finer micron wool has increased prices from the beginning of March to the beginning of April, with 29 micron lifting $1.52/kg or 17 percent to $10.42/kg clean.

On a positive note, a smaller number of lambs around has shortened the supply of lamb’s wool which is trading well.

This season has been a challenging year for fleece yellowing due to heavy rain earlier in the year. This has meant that good coloured fleeces have been sought in all classes.

Good coloured lamb’s wool in a good combing length (70-125mm) is in greatest demand.

In the most recent North Island auction, 28 micron ⅔ lamb fleece sold for $7.32/kg clean for 28 2/3 micron and $5.94/kg clean for 29 2/3 micron.

In the South Island, lamb wool has increased over the last month with 29 micron selling for $6.38/kg and $5.90/kg clean for 30 micron at the latest auction on April 6.

The Australian wool market is in a comfortable place right now, despite issues with quality due to the ongoing drought, in particular with tensile strength and shortened staple length.

The AWEX Eastern Market Indicator has slowly fallen for the last six weeks to sit at 1943/kg clean, although this is still 50c/kg above for the similar period last year.

Lamb

There is a lot of daylight between lamb carcass weights this season and any other season in the AgriHQ database.

The season-to-date average hot carcass weight is 18.73kg, in the latest kill statistics. The next highest season is 2011/12 which is 18.2kg, 550g/lamb behind.

Due to favourable feed levels, the season started with an average hot carcass weight of just over 22kg, reflecting the larger volume of heavier old season lambs carried into October. This was a whole kilogram ahead of last season, which was a strong year.

Weekly carcass weights dropped briefly in line with last year’s weights during November and December when new season lambs began in earnest.

In recent weeks, the average provisional hot carcass weight has been trending about 600g/lamb above last year.

The latest lamb kill statistics show the number of lambs killed this season has caught up with last season and, with a higher average carcass weight, production will be ahead of last year — at least for now.

A downward trend is emerging in lamb carcass weights, particularly for the South Island. This supports anecdotal evidence that poor feed quality is challenging lamb yields in many areas.

Beef

The US grinding market is defying gravity at the moment, with grinding beef returns the highest they have been since 2015.

In the past month, the 95CL (bull) beef price has jumped up 65c/kg and is currently sitting at $7.90/kg.

The 90CL (cow) price has climbed 55c/kg and is $7.26/kg. Competitive tension with the growing Chinese grinding market is a key driver of this strong price.

Manufacturing beef exports to China have increased by 17,200t (up 211 percent) in the season to date, whereas manufacturing beef imports into the US have fallen by the same amount. US grinders are finding that they have to compete with Chinese demand for manufacturing beef in what would generally be New Zealand’s peak supply period.

Furthermore, the free trade agreement between China and NZ means that export conditions in the Chinese market are more favourable than in the US.

The “China factor” combined with a patchy New Zealand cow kill has meant that high US imported beef prices have been realised despite strong slaughter rates in Australia (up 26 percent for cattle this week compared to last year).

While the international market for manufacturing beef is strong, this has not been reflected in processor schedules.

The farm-gate operating price for bull beef has been at a five-year low and the AgriHQ bull procurement indicator has just about fallen off the bottom of the chart and is sitting at 61 to 65 percent of export earnings paid in bull procurement.

This week saw a small correction in bull farm operating prices, bringing the average up to $5.10/kg.

Wool

The coarse wool market has not changed a huge amount in the last month - 36-39 micron has sold in a range of $3.08-$3.19/kg clean, fine crossbred (32-33 micron) at $4.43-$5.47/kg clean.

A limited supply of finer micron wool has increased prices from the beginning of March to the beginning of April, with 29 micron lifting $1.52/kg or 17 percent to $10.42/kg clean.

On a positive note, a smaller number of lambs around has shortened the supply of lamb’s wool which is trading well.

This season has been a challenging year for fleece yellowing due to heavy rain earlier in the year. This has meant that good coloured fleeces have been sought in all classes.

Good coloured lamb’s wool in a good combing length (70-125mm) is in greatest demand.

In the most recent North Island auction, 28 micron ⅔ lamb fleece sold for $7.32/kg clean for 28 2/3 micron and $5.94/kg clean for 29 2/3 micron.

In the South Island, lamb wool has increased over the last month with 29 micron selling for $6.38/kg and $5.90/kg clean for 30 micron at the latest auction on April 6.

The Australian wool market is in a comfortable place right now, despite issues with quality due to the ongoing drought, in particular with tensile strength and shortened staple length.

The AWEX Eastern Market Indicator has slowly fallen for the last six weeks to sit at 1943/kg clean, although this is still 50c/kg above for the similar period last year.

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