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 March 2020.
The price of yellow maize was supported by the weakened rand during March. The market closed at R2 800/ton.
The rand weakened against the major currencies during March. At the end of the month the rand traded at R17,80 against the dollar and R19,72 against the euro.
Consumer price inflation (CPI) increased slightly to 4,6%, while producer price inflation (PPI) decreased to 4,5% on a year-on-year basis during February. The prime lending rate decreased to 8,75% during March, with the expectation that it will decrease even further by 0,75% over the next three quarters.
The bad news is that the economic growth during the last quarter of 2019, as represented by the gross domestic product (GDP), has shrunk to -0,5% on a year-on-year basis. The economy also decreased by 1,4% on a quarter-on-quarter basis. With two consecutive quarters of economic shrinkage, South Africa has now slumped into a recession.
Red meat market
During March, the market price of A-grade lamb carcasses increased. The prices of B- and C-grade mutton carcasses remained volatile. Beef prices followed suit and mimicked the market trends of both lamb and mutton.
The last available prices for A2, B2 and C2 beef carcasses in March were R47,22/kg, R42,66/kg and R40,28, respectively. The last available prices for lamb and mutton carcasses were R77,98/kg for A2, R57,67/kg for B2 and R54,74/kg for C2.
The price of weaner lambs moved sideways, while the price of weaner calves decreased. The last available prices were R30,24 and R33,83 for weaner calves and lambs, respectively. The market for hides and skins also traded sideways.
Wool and mohair market
The indicator price for both wool and mohair decreased during the last auction in March. The indicator price of clean wool traded 12,5% lower compared to the previous auction, and also traded 39,8% lower than a year ago. The indicator price of mohair closed 7,7% down from the previous auction, and decreased by 8,4% compared to last year.
The producer price index of milk, eggs and dairy products decreased during February. The consumer price index of milk, eggs and cheese increased during the same period.
Click here to read the February 2020 market overview. – Dr Frikkie Maré, University of the Free State