By Georgia Devenish - Agricultural Research Analyst at JLL
With goat slaughter down 38 percent compared to this time last year and strong demand from export market, goat prices have been pushed to a record $7.80 per kilogram carcase weight. Although a minor producer of goat meat, Australia is one of the largest exporters globally. Julie Petty, Meat and Livestock Australia's goat industry project manager, said that export markets for goat meat were “still strong”, however as prices are currently in uncharted territory it is hard to know what will happen as some markets are “price sensitive”.Ad - Mulcahy & Co Agri Solutions provides a wide range of Farm Financial Services, they make sure you get results from all your hard work - Ad
The results from the latest Australian Lot Feeders’ Association (ALFA) and Meat and Livestock Australia feedlot survey have been released. It shows the number of cattle on feed nationally continued to grow over the first quarter of 2019, surpassing the record level of 1,145,563 head of cattle on feed in the December quarter of 2018. ALFA President, Bryce Camm, also said licensed capacity reached a new record of 1,363,046 head, up 70,376 head year-on-year.
Lamb and mutton prices have continued to increase across all categories having gained considerable ground since March as supplies tighten. The Eastern States Trade Lamb Indicator (ESTLI) is trading 28 percent higher than this year's low. Mecardo market analyst, Matt Dalgleish, said seasonal percentage price patterns suggest that an ESTLI peak near 900 cents and a national mutton indicator (NMI) peak approaching 660 cent this year is not out of the question. A weakening Australian dollar combined with robust offshore demand should continue to provide price support across ovine markets in the coming weeks.
The impact of African Swine Fever (ASF) on the Chinese pork industry has left a 5 percent hole in the global meat market according to the US Department of Agriculture (USDA). Industry estimates suggest up to 200 million Chinese pigs will be lost due to the disease; this is considerably more than the 125 million pigs slaughtered in the US in 2018 and it positively dwarfs the 5.424 million slaughtered here in Australia last year. Pork futures in the US have risen 52 percent during 2019 so far, with wholesale pork prices now beginning to follow. The USDA estimates that China could import up to 33 percent more pork this year to meet domestic demand.
Australian wheat prices came near to hitting a 12 month low in April following a sustained period of strong post-harvest prices. Commonwealth Bank analyst, Tobin Gorey, says high grain output in Russia and Ukraine increased grain stockpiles in the US, with the international wheat price hitting about $340 per tonne in mid-April. Barley prices, meanwhile, have lifted, with Feed 1 barley delivered to Melbourne on April 30 achieving $385 per tonne. This is above the $296 per tonne received at the same time last year.
According to the Australian Bureau of Statistics, Australian chickpea exports totalled 25,364 tonne in March, down 46 percent from the 10 month high recorded in February. Bangladesh is Australia’s only bulk chickpea destination as India, traditionally Australia’s biggest chickpea market, remains closed to imports as it works through its own chickpea supply.
Fonterra is to close its Dennington factory in Victoria. Frank Kelly, the site's delegate for the National Union of Workers, said staff were told yesterday afternoon that the factory was closing in November due to a lack of milk. According to Kelly the plant had "only been running at about 30 per cent capacity, so something was going to happen." This comes after plans of an $8.6 million expansion of the Dennington factory were revealed in January 2018.
Australian Agricultural Company (AACo) chief executive officer, Hugh Killen, has confirmed a statuary EBITDA loss of $182.7 million in reporting the company's full year financial results. Extreme weather conditions during the beginning of 2019 were cited as a key reason for the significant loss. Killen told investors the company had sustained stock losses of 43,000 head as a result of flooding across several of AACo's Gulf of Carpentaria stations. "We believe we have lost somewhere around 43,000 head at a cost of $42.4 million." He further went on to state that fences and water infrastructure damage would cost the Australian Agricultural Company between $6 million and $8 million to repair.Ad - Mulcahy & Co Agri Solutions provides a wide range of Farm Financial Services, they make sure you get results from all your hard work - Ad
Drought conditions across large parts of eastern Australia have impacted Elders’ half-year results, with statutory net profit down $14 million from the same period last year to $27.4 million. The company told shareholders the decline in earnings reflected lower wool volumes, increases in costs associated with footprint growth, and continued investment in digital and technology areas.
Drought in eastern Australia has had an impacted on sales for leading Australian fertiliser company Incitec Pivot Limited (IPL), which has released its financial results for the half-year ended 31 March. The company’s total earnings before interest and taxes (EBIT) for FH19 totalled $119 million after $141 million of non-recurring impacts, well down from the corresponding FH18 result of $240 million. These impacts included the extreme flooding in North Queensland which closed the rail line from its Phosphate Hill facility to Townsville from January to April. This reduced IPL’s EBIT in FH19 by $60 million, and is expected to cut $55 million from FH19 earnings.
Malaysia's Sarawak Economic Development Corporation has purchased the 41,500 hectare "Carmor Plains" property for $20 million. It is understood the company will use the cattle station located on the floodplains east of Darwin as a site to fatten their cattle from their other property "Rosewood Station". The last time "Carmor Plains" was purchased was in 2001 when it sold for $2.8 million to the the Kelman family.
Age restrictions on US beef exports to Japan have been lifted. The new terms will allow US products from all cattle, regardless of age, to enter Japan for the first time since 2003. The USDA has estimated that the expanded access could increase US beef exports to Japan by up to $US200 million annually.
The US is a key competitor in important Asian markets for Australian red meat, including Japan and South Korea. The US is the world's largest beef producer and has the greatest overlap with Australia's high value export markets including the US domestic market.Ad - Mulcahy & Co Agri Solutions provides a wide range of Farm Financial Services, they make sure you get results from all your hard work - Ad
Wool prices have fallen to their lowest rate in six months. The Eastern Market Indicator dropped 59 cents per kilogram to 1,893 cents per kilogram last week — the first time it has dipped below 1,900 cents per kilogram in 2019. The price easing has been attributed to the removal of China’s ban on South African wool and the reigniting of US-China tensions.