Sheep­meat is heat­ing up

Central and North Rural Weekly - - NEWS -

ABARES cost of pro­duc­tion es­ti­mates sug­gest sig­nif­i­cant economies of size in the Aus­tralian sheep­meat in­dus­try of­fer pro­duc­ers a strong in­cen­tive to in­crease pro­duc­tion and prof­itabil­ity.

The ABARES re­port, com­mis­sioned by MLA, presents cost of pro­duc­tion es­ti­mates for sheep pro­duc­ers for the three years end­ing 2015-16, based on data ABARES col­lects on broad­acre farms through its Aus­tralian Agri­cul­tural and Graz­ing In­dus­tries Sur­vey.

Pro­duc­ers can use this re­port to com­pare the cost of pro­duc­tion of their sheep flock with the in­dus­try av­er­age, and iden­tify op­por­tu­ni­ties for im­prove­ments within their busi­ness.

From 2013-14 to 2015-16, wool, lamb and sheep prices in­creased.

How­ever on-farm per kilo­gram cost of sheep pro­duc­tion also lifted over the same pe­riod (in real terms).

For the three years, the na­tional av­er­age to­tal cost of sheep pro­duc­tion was 311c/kg live weight (lwt) for all sheep pro­duc­ers and 298c/kg lwt for slaugh­ter lamb pro­duc­ers.

For slaugh­ter lamb pro­duc­ers, spend­ing was higher across most cost com­po­nents in 2015-16, com­pared to the pre­vi­ous year.

Poor sea­sonal con­di­tions across much of the south-east saw ex­pen­di­ture on fod­der rise 28% year-on-year.

The cost of sheep pur­chases was up 25% in 2015-16, as a re­sult of higher lamb and sheep prices.

How­ever the sur­vey re­sults show the av­er­age cost of pro­duc­tion de­clined as lamb pro­duc­tion in­creased.

For the three years to 2015-16, the to­tal cost of pro­duc­tion (in­clud­ing the value of un­paid labour) for the small­est slaugh­ter lamb en­ter­prises sur­veyed (200-500 lambs sold) av­er­aged 366c/kg, whereas the cost of pro­duc­tion for slaugh­ter lamb pro­duc­ers sell­ing more than 2000 lambs av­er­aged 257c/kg.

PHOTO: FILE

FIG­URES: An ABARES re­port has looked at the fu­ture of sheep­meat pro­duc­tion and prof­itabil­ity.

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