Frikkie Maré, agricultural economist at the University of the Free State (UFS), gives his monthly market overview of agricultural commodity markets.
During the first half of January, the price of yellow maize traded sideways before it showed a downward trend in the second half of the month. The price closed at R1 929/ton.
The rand strengthened further against the dollar and the euro in January. For the first time in a while, the value of the dollar was below R12. By the end of January, the rand traded at R11,86 against the dollar and R14,75 against the euro.
Consumer price inflation (CPI) increased slightly during December to 4,7% on a year-on-year basis, while producer price inflation (PPI) increased to 5,2% in the same period. Economic growth for the third quarter of 2017, as indicated by GDP, only increased by 0,8% on a year-on-year basis. The agricultural industry again contributed positively to this growth, as it did in the second quarter.
Red meat market
The prices for A and B grade beef declined sharply early January, while the price for C grade increased slightly. The last available prices for beef in January were R46,10/kg for A2, R43,80/kg for B2 and R43,24/kg for C2. Mutton prices saw sharp declines for all grades, with the last available prices for A2, B2 and C2 sheep carcasses R73,61/kg, R57,64/kg and R44,54/kg, respectively. Prices for weaner animals, both calves and lambs, were very volatile. The price for both Dorper and Merino skins traded sideways and prices for hides decreased.
Wool and mohair markets
The indicator price for clean wool decreased by 0,7% during the last auction in January compared to the previous auction. This is 13,8% higher than the previous year. Mohair traded sideways in December, with prices remaining unchanged compared to the previous auction and 20,9% higher than last year.
The producer price index for milk and eggs flattened off in December after months of sharp increases, while the price index for milk products increased slightly. The consumer price index for milk, eggs and cheese increased during the same period.