Lamb, sheep prices trending low
Lamb and sheep prices are trending low as the season begins to drop off and farmers prepare to make decisions to sell or hold onto stock into the new year.
Horsham Rural City Council commercial enterprises co-ordinator Paul Christopher said due to supply and demand pressures, lamb and sheep prices were low in comparison to recent years.
“New season lambs are selling for $170, whereas two or three years ago they would have been $250 to $300,” he said.
“This is because the chillers are full. We need people to be buying lamb so the supply chain moves.
“Heavy quality lambs for export are making good money, but anything ready for slaughter is going cheaper. “Sheep prices have been hit badly.” Mr Christopher said low prices occurring now had happened before.
“We are waiting to see what will happen in the new year and whether prices go back up into the highs we saw recently,” he said.
“We don’t know, but it would be nice to get a middle ground.
“You want farmers to be getting good prices and consumers to be paying an affordable price for the end product.”
Mr Christopher said people who buy
lambs to feed and sell later, or ewes for breeding, were still purchasing stock.
“The only difference is the outlay is less for them, so this is positive for anyone who wants new ewes,” he said.
“There’s an opportunity to buy fresh livestock, and while some will be disappointed with the prices, for others it could mean next year’s lambs pay for themselves.”
Mr Christopher said because lambs could only be sold up to 14 months before their price dropped back, farmers
would need to make a call in the next week or so if they held onto current stock.
“The season has started to drop off and while the lambs have looked magnificent, they’re starting to dry off,” he said.
“They will need to be shorn and put on stubbles or in really clean paddocks as producers weigh up what they could be worth in the new year.”
Market insight
A Meat and Livestock Australia, MLA analysis of the Australian Bureau
of Statistics, ABS, latest livestock data indicates Australia is entering a destocking phase for sheep.
MLA market information manager Stephen Bignell said the data was reflective of the drier conditions experienced during winter and producers’ response to the El Niño.
He said the September quarter showed a 5.7 percent increase in red meat production, an 8.7 percent increase in lamb slaughter to 6.6 million head, and a 7.7 percent increase in lamb meat production to 160,954 tonnes. He said sheep slaughter, in contrast, decreased by 18.1 percent to 2.1 million head, with mutton production back 11.8 percent to 54,189 tonnes, with the decrease largely due to elevated lamb slaughter reducing sheep processing capacity.
“Even though there is an increase in slaughter for cattle and lamb production, the ABS numbers are reflecting lower overall value due to the lower values being experienced at the sale yards for producers,” he said.
“The gross value of cattle and calves slaughter decreased 2.5 percent to $3.2 billion, while sheep and lamb decreased by 18.5 percent to $956.6 million.
“This is the first time since producer receipts have been recorded that quarterly sheep and lamb receipts were below $1 billion in value.”
Mr Bignell said the data showed a turning point from a herd rebuild in the past three years to a destocking period.
He said the weather in the coming months would be crucial for determining if there would be a longer trend of destocking.
“We’ve started to see some positive trends in the weather and a solid market response in recent weeks, and a continuation of positive rainfall will further drive that confidence,” Mr Bignell said.