Dr Frikkie Maré, academic departmental head of the Department of Agricultural Economics at the University of the Free State (UFS), provides a monthly market overview of the previous month’s agricultural markets. This is the overview for August 2019.
The price of yellow maize weakened during the month of August and ended on R2 661/ton. This can be attributed to grading problems that saw most of the yellow maize harvest being channeled into the livestock feed industry.
The rand weakened during August against the main currencies and slumped to its weakest rate so far for 2019. The rand traded at R15,18 and R16,68, respectively, against the dollar and the euro at the end of the month.
During August, the consumer price index (CPI) decreased to 4% year-on-year, while the producer price index (PPI) decreased to 4,9% on a year-on-year basis. The economic growth for quarter two of 2019, as prescribed by the GDP, increased to 0,9% year-on-year. The economy also grew by 3,1% quarter-on-quarter.
Red meat market
The market for all three grades of beef carcasses showed further sideways movement with inconsistent pricing during August. However, the price of A2 lamb and sheep carcasses decreased before increasing again at the end of the month. B2 carcass prices strengthened while the C2 price showed a reasonably sideways movement.
The last available prices for beef in August were R45,11/kg for A2, R39,06/kg for B2 and R37,07/kg for C2. The last available prices for A2, B2 and C2 lamb and sheep carcasses were R69,44/kg, R54,77/kg and R49,86/kg, respectively. In the case of weaner animals, the price of lamb fell substantially while the price of beef strengthened. The last available prices were R28,49/kg for calves and R34,00/kg for lambs. The prices of hides and skins also showed further sideways movement.
Wool and mohair market
The wool and mohair market is currently under immense pressure due to buyers’ cash flow hiccups, caused by a lack of wool exports following the foot-and-mouth disease outbreak. There was only one mohair auction during August with the rest of the wool auctions postponed until September.
During the first auction of the season, the clean wool indicator decreased by 28,3% when compared to the last auction of the previous season. On a year-on-year basis, the price of clean wool decreased to 61,3%. The mohair indicator price weakened by 11,4% compared to the previous auction. It also traded 39,5% lower than last year.
The PPI of milk and eggs decreased in August, while the index of milk products improved. The CPI of milk, eggs and cheese increased during the same period.
Click here to read July’s market overview.
For more information send an email to Dr Frikkie Maré MareFA@ufs.ac.za.