US de­mand boosts beef cat­tle prices

Matamata Chronicle - - Rural Delivery - By HEATHER CHALMERS

Sheep and beef farm­ers are achiev­ing bet­ter prices than their dairy coun­ter­parts this sea­son – but don’t ex­pect them to cel­e­brate.

Beef, lamb and wool prices are all trad­ing close to or above the dairy pay­out, with early sea­son lamb com­fort­ably above $6/kg and ex­pected to av­er­age $103 a head for the sea­son.

Spurred by de­mand from the United States man­u­fac­tur­ing beef mar­ket, farm gate cat­tle prices are now at un­prece­dented record highs, with South Is­land steers and bulls sell­ing at just over $5/kg, up $1/kg from this time last year.

New Zealand Wool Ser­vices In­ter­na­tional’s coarse wool in­di­ca­tor is presently about $5.50/kg clean after peak­ing ear­lier this sea­son at $5.70/kg.

Cross­bred wool pro­duc­ers were ex­pected to achieve prices slightly bet­ter but no worse than last year, mar­ket­ing ex­ec­u­tive Mal­colm Ching said.

In con­trast, Fon­terra’s fore­cast dairy pay­out for the 2014- 15 sea­son, al­ready cut from $6/kgMS to $5.30, is tipped to go even lower.

While beef and lamb prices tra­di­tion­ally level off as the main sea­son sup­ply be­comes avail­able, Sil­ver Fern Farms ex­pects farm gate prices for the next 12 months to trade at $ 5.50-$ 6.70/ kg for lamb $4.50- $5.50/kg for beef.

Beef + Lamb New Zealand Eco­nomic Ser­vice chief economist An­drew Burtt said beef prices have risen in re­sponse to the cat­tle herd in the United States fall­ing to a 60-year low

and after a long-term herd and pro­longed drought.

In Oc­to­ber 2014, av­er­age beef ex­port val­ues were just un­der $8000 a tonne, com­pared with $6100/t for Oc­to­ber 2013, and an av­er­age of about $6000/t for the past four sea­sons.

Cat­tle rev­enues are es­ti­mated to rep­re­sent 23 per cent of a farmer’s in­come in 2014- 15, com­pared with 20 per cent in 2010-11. Av­er­age sheep and beef farm profit be­fore tax is pre­dicted to in­crease 8 per cent on last sea­son to $110,800.

North­ern South Is­land Beef and Lamb Farmer Coun­cil chair­man Mike Wil­liams said it would be nice for sheep and beef

sell-off to have its turn in the sun.

‘‘We don’t want it to be at the ex­pense of the dairy in­dus­try.’’

‘‘ You don’t re­ally cel­e­brate un­til you have the money in the bank. We are only en­ter­ing the time of the year when most farm­ers are start­ing to sell lambs and cat­tle. We have seen prices high at this time of the year and then drop as greater num­bers be­come avail­able.

‘‘One is­sue for sheep and beef farm­ing is that dairy has looked a more at­trac­tive land use and so peo­ple who could con­vert have done so,’’ Wil­liams said.

‘‘I’d like to see the con­ver­sion rate halt, and there are hope­ful signs we are see­ing the end in the de­cline in sheep num­bers.’’

While the beef price lift was wel­comed, good qual­ity prime

‘‘Bull beef, used in man­u­fac­tur­ing (grind­ing) beef, is get­ting as much as good prime steer or heifer. The dif­fer­en­ti­a­tion in price could be higher, and some meat com­pa­nies are start­ing to of­fer pre­mi­ums for qual­ity.

‘‘ Beef cat­tle has al­ways strug­gled fi­nan­cially on a dol­lar re­turn a stock unit, but it plays a great role on the farm pre­par­ing pas­tures and eats a lower class of for­age.

‘‘Things are look­ing good. We had a good lamb­ing sea­son with good sur­vival and growth rates.

‘‘How­ever, if we don’t get rain soon, growth rates will slow,’’ he said.


Look­ing ahead: Sil­ver Fern Farms

ex­pects farm gate prices for

the next 12 months to trade in a range of

$5.50 to $6.70/kg for lamb and $4.50 to $5.50/kg for beef.

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