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.
As the prospects for the maize crop improve, the price of yellow maize showed a decrease during February, ending at R2 580/ton.
After a good run in January, the rand lost ground in February. It traded lower at R14,07 and R16,03 against the US dollar and the Euro, respectively. Consumer price inflation (CPI) slowed further in February to 4% year-on-year. Producer price inflation (PPI) also slowed in February to 4,1% year-on-year. The bad news is that economic growth for the fourth quarter of last year, represented by the GDP, slowed to 1,1% year-on-year. This is compared to 1,3% in the third quarter.
Red meat market
It seems that the red meat market has started a slow recovery after January’s perfect storm. Most price categories showed recovery in February. The last available prices for beef in February were R39,39/kg for A2, R38,32/kg for B2 and R38,12/kg for C2. The last available prices for A2, B2 and C2 mutton and lamb carcasses were R65,49/kg, R56,68/kg en R52,94/kg respectively. In the case of weaner animals the last available prices were R29,91/kg for weaner calves and R34,50/kg for lambs. The market for hides and skins is under pressure and even the price of Merino hides, usually strong, decreased by more than 50% in Feburaury. Dorper hides also traded lower.
Wool and mohair market
It is interesting to note that the indicator price for clean wool moved sideways In February, despite the fact that China closed its borders for South African wool due to the FMD outbreak. Clean wool traded 0,3% lower at the last auction in February. The indicator price was still 15% higher than the previous year. The indictaor price of mohair showed no change in February and traded on the same level as in December 2018 last year. This level was however 11,5% higher compared to the previous year.
The producer price index for milk and eggs fell in February while the index for dairy products moved sideways. The consumer price index for milk, eggs and cheese increased during the same period.