Lamb, beef and dairy prices

The Press takes a look at developments in beef, lamb and dairy prices.

Lamb

In the past month, the value of the New Zealand dollar has declined by 3 per cent against the British pound. However, this is still 13 per cent above its level at the same time last year, and 17 per cent above the average of the previous five years.

Meanwhile, the British CKT lamb leg price (cost, insurance and freight) is at the same level as this time last year and appears to have hit a ceiling for now.

This would indicate exporters' margins have reduced in the past year, which is now being reflected in the falling schedule prices at the farm gate.

A further decline in schedules of up to 15 cents a kilogram was experienced across the country, with the larger falls occurring in the North Island. This has seen the schedule price of a 17.5kg lamb slip below $90 for the first time since March.

Prime lambs at saleyards appear to have come into line with schedules, particularly in the North Island, where a medium prime lamb is fetching just under $90.

In the South Island, the same lamb has an average $97 price.

Beef

United States imported bull gained a further US2c/lb this week, lifting to US142c/lb.

The US6c/lb lift in price over the past two weeks has come about as the availability of imported bull remains tight.

It is still early in New Zealand's new slaughter season, but bull numbers are already well down on where many market participants expected them to be.

Figures for the five weeks of the new season suggest New Zealand is already 6000 head down on its five- year average as good grass cover remains prevalent across the country. As mentioned in earlier reports, this rise in price will be tested when an influx in slaughter numbers is seen.

US imported cow gained US1c/lb, as the US domestic market looked to firm slightly on the back of improved export figures to Asia. US imported cow finished the week at US131c/lb.

The strengthening US imported market has flowed through to farm gate prices, with an average 4c/kg lift in schedule prices across the grades.

Dairy

The NZX Agrifax weighted- average dairy commodity price peaked in November 2007 at US$5460 a tonne, before it fell 58 per cent over the course of 18 months to bottom out at US$2290 in June.

Since then, the weighted-average dairy commodity price has recovered almost half of these losses, this week lifting to US$3990/tonne.

This highlights the volatility of the dairy commodities market. Anhydrous milkfat's rapid price gains over the past couple of weeks simmered this week, with only a 2 per cent rise from US$4800/tonne to US$4900/tonne.

Casein and cheddar had minimal gains of 1 per cent to US$8200/tonne and US$3800/tonne respectively.

Underlying demand for wholemilk powder remains firm, adding a further US$100/tonne this week to reach US$3500/tonne. Skim milk powder's gain was slightly larger at US$150/tonne to US$3350/tonne.

Butter firmed over the week, climbing 7 per cent from US$3450/ tonne to US$3700/tonne.