Mar­ket de­mands more prime lambs in dry

Warwick Daily News - South West Queensland Rural Weekly - - Front Page - CAS­SAN­DRA GLOVER Cas­san­dra.glover@ru­ral­weekly.com.au

IINTENSIFYING poor con­di­tions across many of Aus­tralia’s key sheep pro­duc­tion ar­eas have caused a sig­nif­i­cant up­ward re­vi­sion of sheep slaugh­ter fore­casts for 2018 in Meat & Live­stock Aus­tralia’s Sheep In­dus­try Pro­jec­tions Septem­ber up­date.

An­nual lamb slaugh­ter is now pro­jected to be

22.9 mil­lion head for 2018, up 2 per cent on 2017, while sheep slaugh­ter is fore­cast to reach 9.3 mil­lion head, up

23 per cent on 2017 lev­els. MLA’s mar­ket in­tel­li­gence man­ager, Scott Tolmie, said it had been a year of ex­tremes so far for the Aus­tralian lamb mar­ket, with prices soar­ing into un­charted ter­ri­tory as strong de­mand meets tight­en­ing sup­ply.

“Aus­tralian lamb prices have been ris­ing strongly since April, break­ing records as they smashed through the

700c and 800c/kg car­case weight marks for the first time,” Mr Tolmie said.

“Poor sea­sonal con­di­tions and high feed costs have led to a wan­ing sup­ply of fin­ished lambs as the year has pro­gressed.

“This, com­bined with strong in­ter­na­tional de­mand, has re­sulted in fierce com­pe­ti­tion for a di­min­ish­ing sup­ply and driven up prices across the board.”

Live­stock agent Ge­orge McVeigh from TopX in War­wick said he was con­cerned about the num­ber of fin­ished lambs com­ing through the yards.

“The re­ally wor­ry­ing fact is we’re not go­ing to get prime lambs be­cause we don’t have the feed,” he said.

“So the only way we’re go­ing to get prime lambs is if peo­ple are go­ing to grain-fin­ish lambs – and of course the price of grain is very dear.

“So it’s go­ing to be a jug­gling act be­tween the price of grain and the price of fin­ished lambs. You feed them grain to fin­ish them but if they don’t get the end price, they’re not go­ing to feed them grain.

“I’d say the pre­mium price will be for the fin­ished lambs.”

Mr Tolmie said the dry con­di­tions drove in­creased lamb slaugh­ter for the first half of the year.

“It spiked in the se­cond quar­ter of 2018 as con­di­tions wors­ened and pro­duc­ers looked to de­stock. This peaked in June with the high­est month of lamb slaugh­ter on record,” he said.

“Lamb slaugh­ter has fallen in re­cent months due to the de­lay in new-sea­son lambs en­ter­ing the mar­ket.

“With no in­di­ca­tion of im­proved sea­sonal con­di­tions in the short term, re­ports sug­gest there will be greater num­bers of light weight, unfinished new-sea­son lambs com­ing onto the mar­ket this year, as many pro­duc­ers in drought-stricken NSW and north­ern Vic­to­ria face chal­leng­ing feed con­di­tions.

“The tim­ing and qual­ity of the new-sea­son lamb crop will have a large im­pact on prices for the rest of 2018.”

Ross El­lis from McDougall and Sons in War­wick said the mar­ket was start­ing to flat­ten out as new-sea­son lambs start to en­ter the mar­ket.

“It’s pretty tough go­ing. A lot of peo­ple have been turn­ing off the lambs they’d take through sim­ply be­cause of the sea­son,” he said.

“The re­ally high prices have been up there for the ex­port-style lambs 35kg and up­wards. We got to $296 a head for 80kg live weight last week.

“The prices are just com­ing off the boil a lit­tle. They’re still higher than nor­mal but off those peaks we were get­ting a few weeks ago.

“We have Vic­to­rian pro­duc­ers which are start­ing to bring their spring lambs into the mar­ket now, which is start­ing to flat­ten it out a lit­tle. They bring their lambs through a bit ear­lier than us.”

Mr Tolmie said while strong lamb and mut­ton prices had been a mo­ti­vat­ing fac­tor to main­tain or build flock num­bers, the lack of rain across much of Aus­tralia had put a lot of pres­sure on pro­duc­ers to de­stock or sup­ple­men­tary feed.

Look­ing at the ex­port mar­ket, Mr Tolmie said strong global de­mand for Aus­tralian sheep­meat, com­bined with the softer Aus­tralian dol­lar and con­strained do­mes­tic sup­plies out of New Zealand, had sup­ported record ex­port vol­umes and val­ues.

“Lamb ex­ports be­tween Jan­uary and Au­gust in­creased

12 per cent, to a record

183,000 tonnes shipped weight (swt), while mut­ton ship­ments surged 25 per cent, to 105,000 tonnes swt,” Mr Tolmie said.

Fur­ther­more, the unit value of Aus­tralian lamb ex­ports for the year to July reached new record highs at A$8/kg, and was mir­rored in mut­ton which climbed to A$5.88/kg for the same pe­riod.

“These fac­tors saw the value of Aus­tralian sheep­meat ex­ports last fi­nan­cial year hit new heights, at A$3.29 bil­lion. None­the­less the do­mes­tic mar­ket re­mains the sin­gle most valu­able for the in­dus­try, with Aus­tralians the world’s largest con­sumers of lamb on a per capita ba­sis.”

PHOTO: JODIE777

JUG­GLING ACT: Pro­duc­ers are weigh­ing up their op­tions on whether to grain feed lambs to get po­ten­tially higher prices at mar­ket.

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