Rural www.guardianonline.co.nz
Tuesday, February 11, 2020
Ashburton Guardian 13
MARKET REPORT By Guy Trafford For the average New Zealander, the impact of the novel coronavirus is something that is happening overseas, mostly in China, and so long as it stays there, we assume we will be relatively immune from its impacts. On one level this is correct, hopefully our border controls are sound and if it does somehow manage to breach them, then our health systems are more than able to cope. After all, while a nuisance the virus to date has proved no more fatal than the average annual influenza. However, for those involved with food exports and tourism then the impacts are starting to bite. For the food exporters the virus impacts come at a time when the Chinese market (in particular) is already under some pressure. Prior to the outbreak, China was already finding the prices having to be paid for red meat was getting too high. Driven up by the lack of pork availability, prices hit a point where some Chinese customers took a break from imports to let the market cool. Taylor Preston expected this cooling down period to finish after Chinese New Year was over (January 24-30) when buying would resume again, presumably at a slightly more subdued level. This explains some of the price declines seen in recent weeks. In the meantime the coronavirus has struck and severely confused the situation. Chinese New Year has been extended an additional 8 days to February 8, but perhaps more critically, due to restrictions on travel within China, containers of products cannot get off the wharves. Mutton has taken the biggest hit falling 50 cents/kg last week and taking another hit in this week’s schedule. Taylor Preston expect the China market to reopen and recover, the question is when. The meat industry is not the only one impacted. The crayfish industry sends almost all its exported product into China and that trade has also come to a screeching halt. Ditto the log trade. Dairy products are not immune from the influence; again, China is our single largest market (as it is for red meat). Fortunately, dairy products are not as vulnerable as they can be stored when processed into powder and added value. While the recent ANZ Weekly Focus takes a reasonably circumspect view of the impacts,
in my view the repercussions may continue longer and hit deeper for some sectors than we will be remotely comfortable with. What we can see is that the situation is fast moving in the wrong direction. The SARs virus took about 7-8 months the run its course so if the influence of coronavirus takes as long there will need to be some rapid realigning of markets we send product to and no doubt these will be at discounted prices. Markets Without a doubt everything is heading in the wrong direction and it is anyone’s guess as to how long the current trend continues and to what levels they will fall. This week’s summary makes fairly grim reading. The only consolation is that some prices are still ahead of the same time as last year. Sheep meat Anything that relies upon China for support has taken the biggest hits ie mutton but all grades have tumbled considerably. The situation is compounded by the dry weather and lack of space in works. The uncertainty is being felt in the saleyards as well. Ewes are particularly affected reflecting the falls in the processor’s schedules. Wool Only the coarser crossbred wools and lambs to report on from the Napier sale and they have continued the downward trends from the previous weeks. Beef Beef hasn’t been spared the pain either and falls have been considerable. Again, saleyards reflect schedules. Venison While not much venison may go into China it appears to be caught up in the price cutting as will with more trimming on its values. Dairy Last week’s GDT results brought an overall drop of 4.7 per cent, a direct influence of the Chinese virus. The results were mitigated by rises for butter and cheese. The powders were down 2 per cent for SMP and 6.2 per cent for WMP. Volumes were also down 13 per cent. What may mitigate further falls for dairy products is the influence of the dry in the North Island and the lower production levels. Fonterra’s share price has started another downward ride falling to $3.86 from the $4.01, likely another casualty from the China influence.
H
Farm gate price watch … for the latest prices, visit www.interest.co.nz/rural February 11, 2020 current price range Saleyard prices … u LAMB ($/head) weighted average Store 110.00 Prime 120 -168 u HEIFER (c/kg) 250-350 kgs Lwt Store 229.00 u STEER (c/kg) 481-580 Lwt Prime 235 - 240 This week Processor prices … u LAMB ($) including 1kg woolly pelt 15.5 kg YM SI 105 17.5 kg YX SI 119 19.0 kg YX SI 129 21.0 kg YX SI 142 Local trade (c/kg) SI 750 (16-22kg) u MUTTON ($) including 0.5kg pelt 21.0 kg MX1 SI 97 u BEEF (c/kg) P2 steer SI 465 (270-295kg) P Cow SI 356 (170-195kg) M2 Bull SI 445 (296-320kg) Local trade P2 SI 540 (180-280kg) u VENISON ($/hd) gross AP Hind 50kg SI 399 AP Stag 60kg SI 485 AP Stag 80kg SI 646
4 wks ago
115 Archibald Street, Tinwald, Ashburton
NEW ANCHOR STRAPS AVAILABLE
1 year ago
170 286
20 90
430
134
323
220
52 week high low
117 132 143 158 820
133 150 163 180 860
102 116 126 139 730
133 150 163 181 880
100 113 122 135 700
114
132
104
136
99
521
565
486
600
471
410
453
366
482
333
501
547
455
579
440
580
600
530
600
500
414 503 670
453 549 732
476 578 770
505 612 816
399 485 646
Auction prices … u SI WOOL indicator prices (c/kg, clean) Mid mic (23.1-31.5) 998 1,019 Fine Xbrd (31.6-35.0) 342 377 Coarse Xbred >35 mic 267 289 Merino 2,070 2,114
987 425 313 2,056
Source: WSI, NZMerino 866 1,193 866 432 550 326 289 364 267 2,387 2,428 1,588
421 418 412
Source: Midlands Grain 420 440 300 418 435 280 415 430 290
Local market prices … u GRAINS ($/tonne, delivered Canterbury) free price Wheat, milling,12.5%p 416 420 Wheat, feed 414 420 Barley, feed 406 410
Ph 03 307 2354 tincanup@xtra.co.nz www.tinwaldcanvas.co.nz
3 mths ago
52 week high low
International market prices … u LOGS indicator prices, $/tonne Forest index Dec-19 122.00 121.00 118.00
128.00
u DAIRY (NZ$/tonne) Butter Skimmilk powder Wholemilk powder Cheese - cheddar
6,615 3,843 4,490 5,248
Fonterra milk price Fonterra dividend Fonterra share price
6,619 4,803 5,057 6,385
6,064 4,727 4,745 6,045
6,528 4,714 5,197 5,789
2018/19 final $6.35 2018/19 final $0.00
0.6606 0.5970
8,696 4,803 5,242 6,523
5,755 3,599 4,398 5,248
2019/20 f'cast $7.00 - $7.60* 2019/20 $0.15 - $0.25 NZX FCG $3.86
* before retentions
u EXCHANGE RATE (NZ$1.00=) US dollar 0.6400 Euro 0.5847
Source: PF Olsen 138.00 118.00
0.6338 0.5752
0.6765 0.5974
0.6929 0.6123
Comprehensive data is available from the supplier www.interest.co.nz/rural
0.6254 0.5579
