The ongoing shortage of prime stock this winter is being felt on the North Island local trade and export market, where prices have risen sharply in recent weeks.
The AgriHQ indicator price for North Island cattle has in the past three weeks risen between 25c to 45c/kg as processors compete for stock.
South Island prices have lifted by 15c/kg to 35c/kg.
AgriHQ senior analyst Mel Croad said the key driver of these higher prices has been the sharp fall in the availability and number of stock killed this winter.
“This has led to the return of the once-typical winter pricing rally as local trade
retailers still need to meet their requirements,” she said.
“The fact the bull price is suddenly trailing prime and local trade by 15 to 20c/kg across the country despite stronger export conditions, demonstrates the rapid upside is predominantly being driven by local trade.
“A lot of that is because kill rates have fallen off the cliff in the North Island,” she said.
Earlier forecasts that prime cattle prices in the North Island could be mid-$6/kg in September-October have already been surpassed and Croad forecasts they could peak around $7/kg or more.
Prime and local trade beef prices have risen the most and while prime lamb prices have also improved, the increase has not been to the same extent.
The North Island AgriHQ indicator for bull this week is $6.50/kg, up 25c/kg on three weeks ago, and steer and local trade prime cattle were both $6.65/kg, 35c/kg higher. Lamb was $6.70/kg, 20c/kg higher.
The South Island indicator for bull was $5.75/kg, 15c/kg higher, steer and local trade prime cattle were both $5.95/kg, up 25c/kg, while lamb was $6.65/kg, 15c/kg higher.
Croad said the North Island cattle kill for the past four weeks was 38,000 head less than last year and 27,000 below the five-year average.
“Numbers have fallen faster and harder than usual.”
The South Island cattle kill has been larger over the past four weeks when
compared to the low volumes available for slaughter last year.
Compared with the five-year average, current South Island slaughter rates are back by about 8000 head.
The export market for bull beef has maintained its upside in recent weeks and Croad said this will continue to underpin bull slaughter prices well in to spring.
Prices are currently sitting at US$3/pound for 90CL bull, well ahead of prices at the same time last year of US$2.45/pound.
Procurement pressures have pushed up prices for prime lambs, which have been in short supply due to poor finishing conditions delaying lambs reaching target weights.
Croad said export lamb prices are finally pushing over $6.50/kg and forecast prices will maintain upside to spring, following recent improvements in export values and continued tight supplies.
