As the 2008/09 season came to a close, lamb slaughter numbers ended above early estimations and broke through the 22 million barrier. While this number is 15% down on the previous season, the average slaughter weights were up 4% to 17.66kg. The last time average slaughter weights reached these heights was in the 2004/05 season where slaughter numbers were also below 23 million. This means that product volumes available for export have remained at reasonable levels despite the lower lamb numbers.
Export meat prices last week were unchanged on the previous week, while contracts for the new chilled season are awaiting completion. Demand for new season chilled product appears to be strong, though indications are that prices may be a little softer compared to this time last year.
Schedule prices this week have eased a shade further across the country, while the prime sale prices have remained steady in both Islands with a medium prime lamb now worth an average of $110.
The US National Milk Producers Federation support programme, Cooperatives Working Together announced its third herd retirement of 2009 late last week. In terms of actual numbers, it is unlikely to have any impact on the market as we continue to see low US cattle slaughter numbers and reduced imports available from Australia.
However, psychologically it will not help, as the market remains fragile from continued weak demand. US imported cow prices lost US4c/lb last week, dropping to US128c/lb.
The weak demand is not contained just in the US market, with Japan beef imports for August down 15% on last year.
US imported bull prices look to have been dampened by the looming NZ bull slaughter period. Currently NZ’s bull kill is around 1000 – 2000 per week. However, by the beginning of November the volume will have hit at least 10,000 a week, as it climbs to its seasonal peak in January/February. Last week US imported bull prices eased US3c/lb to US139c/lb.
Schedule prices this week have eased a further 5-15c/kg across both Islands, with steer and heifer prices experiencing the larger falls.
The NZX Agrifax weighted average dairy commodities spot price has now seen 10 consecutive weeks of gains. Currently at US$3240/tonne, it is 41% up on its low of US$2290/tonne at the start of July.
All dairy commodities tracked by NZX Agrifax displayed an upward trend last week. Butter had the greatest gain, up 6%, from US$2500/tonne to US$2650/tonne.
Current market sentiment and prices collected one week out from the Fonterra gDT auction would indicate that the resulting prices will be either steady or show a slight rise on the last auction.