Dr. Frikkie Maré, academic head of the Department of Agricultural Economics at the University of the Free State, gives a monthly market overview of the previous month’s agricultural markets.
Late summer rainfall brought about a positive run for the price of yellow maize during December. The market closed at R2 731/ton.
The rand weakened in December, trading at R14.35 against the US Dollar and R16.46 against the Euro, by the end of the month. Consumer price inflation (CPI) increased to 5.2% in December, while producer price inflation (PPI) slowed to 6.8%. There is some good news, economic growth for the third term of 2018, as represented by the GDP, increased by 1,1% year on year.
Red meat market
It was interesting to see that the markets for beef and mutton moved sideways in December and that the regular December price increases did not occur. The last available prices for beef in December were R45.64/kg for A2, R40.70/kg for B2 and R40.09/kg for C2. A2, B2 and C2 mutton and lamb’s last available prices were R73.78/kg, R64.50/kg and R59.84/kg respectively. In the case of weaner animals, the sharp increase in the maize price put some pressure on the price of weaner calves and weaner lambs. These prices were R31.79/kg for calves and R34.50/kg for lambs. Prices for Dorper skins and hides moved sideways in December, while the price of Merino skins dropped.
Wool and mohair market
The indicator price for clean wool increased by 0.1% at the last auction of 2018. This was 10.2% higher than at the end of 2017. The indicator price for mohair traded 4.1 % lower at the last auction of 2018, which was 16.1% higher than at the end of 2017.
The producer price index (PPI) for milk and eggs fell in December, while the index for milk products rose. The Consumer Price Index (CPI) for milk, eggs and cheese went up during the same period.