This past week, we saw that weaner calf prices dropped further, with the national average price now at R31.20 per kilogram. Last year at this time, the price traded 8.5% higher at R34.10. Regional prices also moved downward, with the price in the Eastern Cape now at R31.25, while the average price in the Northern Cape dropped to R30.82. The A2/3 carcass price stabilized at R54.87, while the C-grade price increased to R43.37 per kilogram. Auction prices were under significant pressure last week, with the national average price lower at R28.67. Calves under 200kg did rise slightly to R29.71, while heavier calves over 250kg dropped further to R26.81 last week. Direct sales were a bit higher, with the average price of calves between 200 and 250kg at R28.36 per kilogram. On the graph, which shows us the price movements of this year compared to 2018, we can see that there is still a very strong price correlation of more than 95% between the two years. This year, prices are currently almost 8% lower than in 2018, which naturally puts a lot of pressure on the producer’s profitability as our costs are currently higher. There’s now much talk about price manipulation, but we need to place this in context. In the 2017/18 grain season, we delivered 15.6 million tons of maize, of which more than 9 million tons were white maize. Weather conditions were much more favorable than what we have seen this season, which caused additional demand for weaner calves and pushed prices higher. In 2019, for example, it was much drier, and we delivered only 11.9 million tons of maize, of which 6.3 million tons were white maize. The average price this year is currently almost 25% higher than what we saw in 2019. What I’m trying to say is that weather conditions play a very important role in determining our local prices. So, if we apply the 2018 season trend to this year’s prices, it looks like we could stay around or above the R31 mark. If we do start receiving rain in December, as weather forecasts indicate, and the maize performs well, we could expect slightly better prices in December and early next year.
In the sheep industry, the feeder lamb price also dropped last week to R39.21 per kilogram, which is still 0.5% higher than last year’s price. The average price in the Central Free State traded at R38.72, while the Western Cape price dropped to R39 per kilogram. The national average feeder lamb price at the weekly auctions was R39 last week, while slaughter lambs traded at R37.26. Direct sales of feeder lambs averaged R41.50, while slaughter lambs traded at R42. The A2/3 price rose to R90.25, while the C2/3 price dropped to R61.29 per kilogram. The A-grade price may now stabilize and rise again as we approach December, while the C-grade price may drop further until mid-October. We also see more than 95% price correlation for store lamb prices with the 2021 season, with this year’s prices averaging about 10% lower. If we follow the 2021 trend for the rest of the year, we could move above the R40 mark during October and November but unfortunately see a sharp decline in December. The rain during December, January, and February can also play a big role in determining whether there will be more or less supply and, therefore, whether prices will be higher or lower.
There were positive movements in the wool market this past week, with the average Cape Wools Merino indicator 1.2% higher at a clean price of R161.24/kg, with certified prices 1% higher at R162.34/kg. In Australia, prices rose by 0.4% to AUS$10.91 per kilogram, with supply lower last week. The increase was mostly attributed to exchange rate movements, with finer wool trading at higher prices.
Ex-abattoir poultry prices showed a sharp increase last week, with the frozen price 1.9% higher at R35.59, fresh prices rising by 1.2% to R34.18, while the IQF price rose to R30.70, and there is still significant upward potential for prices over the next two months.
The latest baconer price also rose last week to R32, the porker price increased to R32.43, while the latest sausage pig price rose to R25.08 per kilogram. There is certainly still upward potential for prices until mid-December, although it unfortunately doesn’t look like we will reach last year’s price levels this year.
Looking at the weekly auction prices for goats, we saw the latest large goat price drop to R45.19, small goat prices stand at R68.98, while doe prices rose to R48.88 last week. The expectation is that we might now enter a downward price trend as we approach the end of the year.
As for feed prices, the latest average Grade 1 lucerne price remained unchanged at R3700 per ton, and we are now waiting for the first bales to come to market. Hay bale prices remained steady, with oat hay at R2700 per ton and peanut hay still at R2400 per ton.
The chop market encountered some resistance, and we saw the average price last week stuck at R3950 per ton due to pressure from the demand side.