Thursday, December 7, 2023

Meat schedule too rigid

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Alliance expects to pay $7 to $8.60/kg for lambs from October to December, the first quarter’s trading of the new financial year.
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The top end is close to current high levels while the lower part of the range would match the build-up of lamb supply into processing plants.

The anticipated price range was presented by company secretary Danny Hailes to about 50 shareholder/suppliers in North Canterbury on Thursday, at Alliance’s opening roadshow meeting of the new season.

Prices for lambs are expected to be $6.70 to $7.10/kg from January to March.

The prices are based on the upside in China, Europe struggling to be competitive, the drought affecting Australian lamb supply and procurement tension between the New Zealand processors, Hailes said. 

Foreign exchange fluctuations are always a factor as well, having been favourable in recent months. 

The Brexit unkowns and United States-China trade war are overhanging everything.

Prices could change quickly, he warned the farmers squashed into a small room at the Rotherham Hotel.

For adult sheep Alliance’s first quarter prices are expected to be $4.70 to $5.80/kg, slipping to a $4.80 to $5.20/kg in the second quarter.

Prices for been in China and the impact of the Australian drought are major price factors and lifting US prices are another influence. Co-product values continued to be soft.

First quarter prime cattle prices are likely to be $5.40 to $6.10/kg, dropping to $5.20-$5.60/kg after that. Bull prices are expected to be $5.25 to $5.70kg from October to December and $5.25 to $5.50/kg January to March. 

Alliance also has a new beef promotion for suppliers, a second Handpicked range added to the prize-winning 55-day aged beef product.

The 55-day (aged in a vacuum bag for that long) will fetch $6.40 to $7.10/kg over the first two quarters and the new offer $6.20 to $6.90/kg. 

Carcases will have to meet marbling, colour and other requirements to qualify for the programme. 

Alliance chief executive David Surveyor said the Handpicked promotion is open to all shareholders and is brand non-specific.

“We’re interested in eating ability.”

They give a $1/kg premium for 55-day aged and 80c/kg for the new offer. 

With them, the company is proving it can provide differentiated product.

Hailes said venison prices have lifted well on the strong lift in pet food prices this year, though they have started to come back. For the first quarter a price range of  $9.30-$10.30/kg is expected, followed by $8kg-$8.50/kg in the following period.

Alliance is reviewing its schedule structure because the current is too rigid in a market that is volatile week-to-week and within a given week, Surveyor said.

Starting in the new season the co-operative is increasing the advance payment for lambs from $20 to $25 a head. 

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