September 3, 2008
Beef Dips As US Domestic Volumes Rise
It was another sluggish week for beef exporters, with reduced prices for product exported to the US, directly attributed to the high availability of US domestic product.
US July cow slaughter figures are 25 per cent higher than last year and have more than offset the reduced level of imported product going into the US.
The NZX Agrifax Market Indicators for bull and cow dropped 4 and 5c/kg respectively as the positive movements in the exchange rate were outweighed by the falling meat prices. Movements in schedule prices were mixed last week, but generally either held steady or moved upward by up to 10c/kg.
While it is only early in the season, sentiment is generally positive regarding the market for the new lamb season. Due to conversion of finishing country to dairying as well as unfavourable weather, lamb numbers will be greatly reduced this season. Early indications are for lamb cut prices to continue to improve across our major European markets. The market indicator last week increased by 11c/kg on the back of improved meat prices and a weaker NZ dollar.
The downward trend is still prevalent in dairy commodity prices with another $US180/tonne being knocked off the weighted average dairy commodity price over the past week, to now reach $US4330/ tonne. Buyers are approaching the market tentatively with the view that as we enter the new southern hemisphere dairy season we will see an upsurge in volume.
The situation we encountered in the past season of global demand outstripping supply currently does not look as strong, as countries worldwide have increased their production levels.
Also milk production in New Zealand and Australia is not expected to be hampered by drought this season as it was last summer and autumn.
Venison prices continue to rocket higher with farmgate prices surpassing the $9kg mark last week. Continuing strong returns in offshore markets coupled with limited deer numbers has resulted in schedule prices reaching unprecedented levels. Prices are generally strong in the spring due to the supply of chilled venison cuts to the northern hemisphere.
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