Agri Trends – Livestock
Recovery in calf prices could serve as a leading indicator for upward scope in retail prices for red meat
Beef: Class A carcass prices continue to remain under pressure, although weekly price declines lost momentum and could signal that this market is approaching a turning point. Over the past months, load shedding and higher interest rates were key factors that impacted retail demand negatively. With a decrease in load-shedding intensity, there seems room for upward price scope over the coming weeks. Weaner calf prices, in turn, have recovered notably from the lows apparent at the start of June. Our view is that this points to firmer intermediate demand from feedlots on the back of an anticipated retail recovery as mentioned above. This is likely also due to seasonal factors related to the utilization of crop residues after the summer crop harvests.
Mutton: Lamb carcass prices continue to be under pressure whilst mutton prices showed notable price recovery over the past week and month. Price increases over the past month are also apparent in feeder lamb prices which usually trade at higher levels during winter months. Feeder lamb prices are however still 14.4% lower than the corresponding time last year. This suggests that local and export demand for both feeder and slaughter lambs are lower than usual for this time of the year.
Pork: Local prices recorded divergent trends, albeit marginal over the past week. There have however been double-digit increases from the lows experienced during the winter months last year. Intensive industries have benefited from the reprieve in load shedding apparent from the start of June. This has likely resulted in improved demand and a slight ease in costs throughout the chain.
Poultry: Local prices have traded sideways over the last weeks. IQF prices did however record a modest decline over the past month on the back of a firmer ZAR. It is expected that this, combined with lower trending feed, will provide some downward scope for prices over the weeks to come.