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 January 2020.
The price of yellow maize rose sharply from R3 415/ton to R3 769/ton for the first half of the month and fell again in the second half of the month to close at R3 462/ton.
During January, the rand weakened against major currencies. At the end of the month, the rand was trading at R15,11 and R18,33 against the dollar and euro, respectively. For December, the consumer price index (CPI) fell to 3,1%, while the producer price index (PPI) remained constant at 3%.
The prime lending rate for January remained at 7%. 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
The price of A2 lamb carcasses fell during January, while the price of B2 and C2 sheep carcasses was slightly volatile and moved sideways. In the case of beef carcasses, the price of the A-grades dropped slightly, while the price of B-grades rose and C-grades remained constant.
For January, the last available prices for A2, B2 and C2 sheep carcasses were R81,08/kg, R66,49/kg and R66,87/kg, respectively. For beef carcasses, the A-, B- and C-grades were R49,64/kg, R45,69/kg and R45,06kg, respectively.
The prices of weaner lambs and calves rose in January. The last available price for lambs was R38,01/kg and R37,80/kg for calves. During January, the price of hides remained relatively constant, while the price of both Dorper and Merino skins fell.
Wool and mohair market
During the last auction for wool in January, the indicator price weakened by 2% from the previous auction and traded 13,9% lower than a year ago. For mohair, the indicator price increased by 30,5% from the previous auction at the end of 2020, while it traded 44,6% higher than a year ago.
Consumer prices, as well as producer prices for milk, eggs and cheese, rose in December.