Speaking at a roadshow meeting in Feilding on Tuesday, Alliance livestock and shareholder services general manager Heather Stacy presented positive price ranges for lamb, mutton and beef.
“It’s been a strong year to date for farmgate prices but we’re really looking forward with caution. These price ranges I’m about to deliver are not a guarantee,” Stacy said.
For lamb farmers could expect farmgate prices in the range from $5.90/kg to $7/kg up to Christmas. The prices did not include either pool payments or loyalty bonuses.
Prices would most likely peak in early November when the pre-Christmas chilled lamb window in the United Kingdom closed and tail off to early next year when the product mix moved more to frozen lamb.
Stacy said prices would start to rise again in the New Year once that mix moved back to more chilled lamb to fill orders for the Easter trade in the UK.
Her biggest concern was the misalignment between farmgate prices for lamb now and returns from export markets.
“The Buy British campaign that has come out of Brexit is having a big influence on demand, which is not as strong.
“You will have seen some other companies in the media on that in recent days and we will have to manage the current situation as best we can,” she said.
Alliance would release a minimum price supply contract before Christmas after positive feedback on them from suppliers last season.
A good market for mutton in Malaysia and strong demand from China would underpin a $4.25-$4.40/kg price range for prime ewes until the closing of the Chinese New Year market about January 10 when demand would ease and prices would likely fall into the range from $3.50-$3.95/kg.
Increasing beef supplies out of Australia and the United States and greater access to key markets for Brazil had created volatility in global markets. Currency was always an unknown factor in farmgate prices.
However, she told farmers to expect prime beef prices to hold in the range of $5.50/kg to $5.90/kg until Christmas then come off slightly to between $5.10/kg and $5.55/kg.
Bull and cow beef producers should expect prices in the range of $4.30/kg to $5.30/kg in the lead-up to Christmas then prices for bull beef would hold in a tighter range from $4.80-$5.20/kg into the start of 2018.
After the meeting Taihape farmer Mark Illston said he was expecting more caution in the price ranges presented.
Other farmers said they appreciated the forecasts and the transparency delivered by Stacy and earlier, by both chairman Murray Taggart and chief executive David Surveyor.
There were concerns raised over the earlier-than-expected closure of the company’s Levin beef processing plant.
It was expected to open late this month after a substantial upgrade and extra shifts would increase its processing capability.
The company had also invested heavily in new processing technology at its Dannevirke site to improve efficiency and throughput.
