Market overview for July 2020

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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 July 2020.

Maize market

The price of yellow maize decreased during the first half of July before it increased again towards the end of the month. The market closed at R2 741/ton.

Yellow maize price. (Source: Stats SA)

Economic indicators

The rand remained stable during the first half of the month, but started to weaken against the other main currencies towards the beginning of August. At the end of July, the rand traded R17,06 and R20,09 against the dollar and euro, respectively.

During June, the consumer price index and producer price index increased year-on-year with 2,2 and 0,5%, respectively, with the prime lending rate decreasing to 7%. The economic growth for the first quarter of 2020, as represented by the gross domestic product (GDP), decreased once again by 0,1% on a year-on-year basis. Quarter-on-quarter the economy shrunk by 2%.

Exchange rate. (Source: Stats SA)
Economic indicator. (Source: Stats SA)
Economic growth. (Source: Stats SA)

Red meat market

During July, the market for both lamb and sheep carcasses strengthened. The prices for A-grade beef carcasses showed sideways movement, while the prices for B- and C-grade carcasses increased. The last available prices for beef carcasses in July were R43,52/kg for A2, R40,92/kg for B2 and R39,47/kg for C2. The last available prices for sheep carcasses in July were R87,46/kg, R68,03/kg and R63,54/kg, respectively.

The prices for weaner lambs and calves increased during July. The last available prices were R31,29/kg for calves and R43,73/kg for lambs. The prices of both hides and Merino skins moved sideways, while the price of Dorper skins remained inconsistent throughout the month.

Beef. (Source: RMAA)
Sheep. (Source: RMAA)
Weaner calves and lambs. (Source: RPO)
Skins and hides. (Source: RMAA)

Wool and mohair market

There were no wool and mohair auctions during the month of July. The indicator price for wool strengthened by 0,1% in June compared to the previous auction, but traded 42% lower than a year ago. The indicator price for mohair decreased by 1,8% during the last auction in June and traded 25,1% lower than a year ago.

Wool. (Source: Cape Wools SA)
Mohair. (Source: Mohair SA)
Mohair. (Source: Mohair SA)

Dairy market

The consumer price of milk, eggs and cheese decreased during June. The producer price of milk products moved sideways, while the price of milk and eggs increased.

Consumer price index. (Source: Stats SA)
Producer price index. (Source: Stats SA)

Click here to read the June 2020 market overview. – Dr Frikkie Maré, University of the Free State