Dr Frikkie Maré, agricultural economist and academic head of the Department of Agricultural Economics at the University of the Free State, gives a monthly agricultural market overview of the previous month’s markets. This is the agricultural market overview for February 2021.
The price of yellow maize fell sharply at the beginning of February and then moved sideways. The market opened at a price of R3 490/ton and closed at R3 320/ton by the end of the month.
The rand initially strengthened against major currencies in February, but weakened again towards the end of the month. The rand traded at R15,01 and R18,14 against the dollar and euro, respectively, by the end of the month. During January, the consumer price index (CPI) increased to 3,2%, while the producer price index (PPI) increased to 3,5%.
The prime lending rate once again remained stable at 7% for February. Economic growth for the third quarter of 2020, represented by gross domestic product (GDP), bounced back after the sharp decline in the second quarter. However, the economy was still 6% smaller than a year ago.
Red meat market
Although slightly volatile, the price of A2 lamb carcasses moved sideways. Meanwhile the price of B2 sheep carcasses increased slightly and that of C2 sheep carcasses decreased slightly. The prices of A and C grade beef carcasses decreased slightly in February, while those of B grades kept increasing.
In February the last available prices for A2, B2 and C2 sheep carcasses were R82,76/kg, R69,10/kg and R66,57/kg, respectively. For the respective A, B and C grades of beef, the prices were R42,92/kg, R47,76/kg and R44,86/kg, respectively. The price of weaner lambs increased, while that of weaner calves fell during February. The last available prices of weaner lambs and calves were R39,82/kg and R38,41/kg, respectively.
The prices of hides and Dorper skins increased, while Merino skins’ price was lower than during the previous month.
Wool and mohair market
During the last wool auction of February, the indicator price strengthened by 1% from the previous sale. However, it traded 5,9% lower than a year ago. For mohair, the indicator price strengthened by 30,5% from the last auction in 2020, while trading 44,60% higher than a year ago.
In the month of January, producer prices of milk, eggs and dairy products fell, while the consumer price of milk, eggs and cheese rose.