Sheep and cattle forecast
AUSTRALIA’S sheep and lamb markets are predicted to strengthen further with near record prices, as production and slaughter forecasts dip lower for 2017.
According to Meat and Livestock Australia’s (MLA) quarterly sheep industry update, the market is expected to remain strong thanks to decreasing national numbers.
MLA’s manager of market information services, Ben Thomas, said the market was being influenced by a combination of factors - including strong producer intention to flock rebuild, strength of the overall wool market and low grain prices.
“Lamb slaughter is expected to contract further this year, revised down a further 500,000 head from original predictions to 21.5 million head for 2017 and down 1.5 million head, or seven per cent, on the 2016 record,” Mr Thomas said.
“In terms of availability throughout the year, on the ground reports suggest a reasonably strong supply through to the end of April, before numbers will become tight until the new spring flush.
“Lamb production is expected to fall six per cent year-on-year in 2017 to 481,600 tonnes carcase weight (cwt), before rebounding back above the 500,000 tonnes mark in 2019.
“Similar to lamb slaughter, mut- ton processing is also expected to contract further year-on-year, with a 1.2 million head, or 17 per cent, year-on-year drop to 5.8 million head for 2017.”
Mr Thomas said with 2.7 million less sheep and lambs set to be processed year-on year, the short supply will keep prices buoyant for the remainder of 2017.
“The current combination of factors in the market will lead prices to average alongside, or even exceed, the previous records,” Mr Thomas said.
“Despite the buoyant market, there is a concern around the sustainability of the current price levels further up the supply chain, with some recent temporary closures of processing facilities.
“The risk for producers is once the number of sheep and lambs available for processing do recover, and if processing capacity remains reduced, there is the potential for a greater correction in prices than otherwise would have been the case.”
Mr Thomas said producers could be cautiously optimistic about prices beyond 2017.
MLA provides a range of market information services including daily red meat market news updates, detailed market analysis, regional saleyard reports, live export information and price indicators.
STRONG PRICES: Meat and Livestock Association manager of market information services, Ben Thomas, has forecast that with 2.7 million less sheep and lambs set to be processed year-on-year, the short supply will keep prices buoyant for the remainder of 2017.