Dr Frikkie Maré, academic 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 February 2020.
The price of yellow maize decreased during February. The market closed at R2 448/ton.
Initially, the rand strengthened during February and then slowly started to lose ground against most major currencies. At the end of the month the rand traded at R15,63 and R17,26, respectively, against the dollar and euro. Both consumer price inflation (CPI) and producer price inflation (PPI) increased to 4,5 and 4,6%, respectively, on a year-on-year basis in January.
The prime lending rate decreased to 9,75% in January. The economic growth in the last quarter of 2019, as represented by the GDP, decreased to -0,5% on a year-on-year basis. The economy also declined by 1,4% quarter-on-quarter. South Africa’s economy has now slumped into a recession due to two consecutive quarters of economic decline.
Red meat market
During February, the market for A-grade mutton carcasses increased, while the price for B and C-grade mutton carcasses remained volatile. The price of all three grades of beef increased during the same period. The latest available prices for beef in February were R46,98/kg for A2, R42,08/kg for B2 and R40,15/kg for C2. A2, B2 and C2 lamb and sheep carcasses were R75,51/kg, R56,14/kg and R52,99/kg, respectively.
In the case of weaner animals, the price of both lamb and beef increased. The latest available prices were R33,09/kg for weaner calves and R34,38/kg for weaner lambs. The price of hides and skins showed further sideways movement.
Wool and mohair market
The market for both wool and mohair strengthened during February. The clean wool indicator increased by 1,8% at the last auction in February, but is still trading 16,4% lower than last year. During the last auction in February, the mohair indicator increased by 3,8% compared to the previous auction. However, it is still trading 22,5% lower than last year.
The PPI of milk and eggs decreased in January, while the index of milk products increased. The CPI of milk, eggs and cheese also increased during the same period.
Click here to read the January 2020 market overview. – Dr Frikkie Maré, University of the Free State