Friday, March 29, 2024

Exchange rate a pain point for meat export

Neal Wallace
A wildly fluctuating exchange rate is causing headaches for meat exporters. Silver Fern Farms (SFF) says between October and November the NZ-US exchange rate rose from $US0.65 to $US0.71, wiping $140 a head off beef and up to $11 off a lamb.
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As of late this week the exchange rate was $US0.72.

In a Christmas update podcast, SFF’s supply chain manager Dan Boulton says in addition to exchange rate fluctuation, the other headwind facing exporters as they enter peak production, is the congested global supply chain.

This is causing issues with container availability, shipping schedules and port access.

Farm gate prices until February are picked to ease compared to previous weeks, but Boulton told suppliers that demand remained strong especially for retail and e-retail markets.

He forecast farm gate prime beef prices, excluding premiums, to range from $4.90-$4.60/kg, bull $4.80-$4.50 and cow $3.60-$3.30.

Boulton says demand for prime beef was strong but has softened for bull.

Demand for lamb was somewhat uncertain and prices have softened in the new year, but mutton remained strong driven by China

He forecast lamb prices to range from $6.50-$6.10 and mutton $4.50-$4.30.

Venison remained reliant on food service with prices expected to reach $5.50-$5.00.

AgriHQ senior analyst Mel Croad, who is currently finalising pricing forecasts for the AgriHQ Livestock Outlook report, says lower farm gate slaughter prices, concerns current ideal growing conditions may not last and the effects of last season’s North Island drought has tempered store buyers.

“Some of us endured a near six-month summer last year and are wary that while conditions are good now, will they last?” she asked.

There is another, albeit small, dark cloud on the global horizon with reports that cases of covid-19 infection in China are increasing, reaching 100 people a day.

News reports are that officials are moving quickly to stamp the virus out before Chinese New Year on February 12.

Demand for meat for the Chinese New Year festivities and beyond is strong, but Croad says the resurgence is a reminder that the virus can reappear at any time and could potentially be disruptive.

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