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 June 2019.
The price of yellow maize was inconsistent during the month of June before ending on R2 855/ton.
The rand weakened at the beginning of June before recovering and strengthening against the main currencies. The rand traded at R14,07 and R15,93 respectively against the dollar and the euro at the end of the month. During June, the consumer price index (CPI) increased to 4,5% year-on-year, while the producer price index (PPI) decreased to 6,4% on a year-on-year basis. Unfortunately the economic growth for quarter one of 2019, as prescribed by the GDP, declined to 0% on a year-on-year basis. The economy also shrunk by 3,2% quarter-on-quarter.
Red meat market
The market for A-grade beef carcasses showed further recovery during June. However, the price of B- and C-grade carcasses showed a reasonably sidewards movement. A-grade carcass prices were inconsistent but increased towards the end of the month, whereas B- and C-grade carcass prices remained inconsistently horizontal. The last available price for beef in June was R44,75/kg for A2, R39,24/kg for B2 and R37,24/kg for C2. The last available prices for A2, B2 and C2 lamb and sheep carcasses were R70,77/kg, R51,38/kg and R47,39/kg respectively. In the case of weaner animals, the price of lamb rose substantially whilst the price of beef remained steady. The last available price was R27,70/kg for calves and R39,18/kg for lambs. The price hides also further sidewards movement, whilst the price of skins showed a further decline.
Wool and mohair market
During the last auction, clean wool traded at the same level as the previous auction, but at 2,9% lower than last year. The mohair indicator price weakened by 2,1% during the last auction of the season, compared to the previous auction. It also traded 2,6% lower than last year.
The producer price index (PPI) of milk and eggs continued to increase in June, while the index of milk products also improved. The consumer price index (CPI) of milk, eggs and cheese sharply increased during the same period.