If you were planning to throw some lamb chops on the coals this weekend, you’ll notice that you’re paying much more for it. The reason? The farm-gate prices for feeder lambs and weaner calves have trended upwards this week.
If you’re not a farmer, you’re probably having slight heart palpitations trying to figure out what “farm-gate prices” are supposed to mean. This simply refers to the price that a farmer will receive when their products have left the farm. It doesn’t include any added deductions or additions for transport between the literal farm gate and the place where the transaction has taken place.
Senior lecturer in agricultural economics at North West University Dr Johnny van der Merwe attribute rising farm-gate prices to the current herd-building season.
Also, the A2/3 slaughter price have been rising since the beginning of the year. It is currently trading at R81.07, peaking at about R86 in Gauteng this week.
(To further explain: South Africa uses a carcass classification system. For this, the following attributes are recorded: carcass mass, age of the animal, fat content, carcass conformation and damage to the carcass.)
This week, the average farm-gate price for feeder lambs increased with most regionals reaching just below the R40-mark. Weaner calves, on the other hand, reached a reported R39.50/kg in the Western Cape and R39.22/kg in other provinces.
“The fact that many producers are currently in herd-building phase means that prices for calves and lambs remain at a higher level at present.
“Demand remains extremely high and the export markets, tax year-end and good rainfall, which brought grazing, also play an important role in keeping demand and prices higher,” Van der Merwe explains.
Pork and poultry prices
Meanwhile pork and poultry prices are beginning to stabilise, says van der Merwe. Disproportions in feed ratios within the pork and poultry industries led to instability at the beginning of the year.
“There is some resistance in the pork and poultry markets with fresh chicken trading at R25.53/kg last week, frozen chicken at R26.41/kg and the latest IQF price at R25.34/kg.
“Porker prices traded lower at R33.22/kg while the baconer price remained at R30.17/kg last week,” he says.
“Feed ratios are tremendously out of proportion at present with the high maize and soybean prices which are currently putting pressure on these producers. It could make for a difficult year despite output prices remaining higher,” he says.