Abattoir shutdowns bite amid stock shortages

Shutdowns for planned maintenance at abattoirs are taking the sting out of sheep and lamb prices, as processors drop shifts or kill days.

Planned maintenance has taken the cream off lamb and sheep prices as abattoirs use winter stock shortages to cut shifts or killing days.

It’s turned around the rapid rise for small stock in particular, as the big spike for sheep and lamb prices – where rates briefly hit more than 900c/kg carcass weight – come off quickly.

The national trade lamb indicator closed on Monday at 773c/kg carcass weight, losing 57c/kg in the past week; the heavy lamb indicator has shed 73c/kg in a fortnight to close at 761/kg while the mutton indicator has slumped 76c/kg to set a price of 368c/kg earlier this week.

Australian Meat Industry Council industry affairs general manager Tim Ryan said it was not uncommon to see plants shut down for a week or possibly two over winter months.

“This gives them the opportunity to get on top of much needed maintenance or to install new equipment while the chain is off,” Mr Ryan said.

Those maintenance works are starting to impact on demand, with Bendigo’s lamb market quoted as up to $10 cheaper early this week and sheep up to $20 lower.

Mr Ryan said nationally, the sheep and lamb kill dropped almost 40,000 for the week ending July 19 and last week “will likely show similarly reduced levels”.

“This is primarily due to limited availability of stock at this time of year but also due to some plants closing for maintenance,” he said

“These winter drops in small stock slaughter have been most notable in NSW and WA, while Victorian kills have held up a bit more.”

But Mr Ryan said any temporarily reduction in kill capacity has not noticeably dampened buyer demand.

“While lamb prices eased somewhat in recent days, the national indicators have held up relatively well by historical comparisons,” he said.

But the slowing of kills could be the calm before the storm, Mr Ryan said.

“These dynamics may begin to shift, however, as turnoff in NSW and then further south ramps up in the second half of 2024,” he said.

“I’m expecting lamb slaughter to comfortably set another record this year.”

The cattle market is in stark contrast, with mid July weekly kill rates the fourth highest for the year.

Meat and Livestock Australia’s market information analyst Emily Tan said there were 141,302 cattle slaughtered for the week ending July 18, boosted by bigger kills in NSW and Tasmania.

“(Cattle) slaughter continues to track 17 per cent above year-to-date figures and is 16 per cent above the rolling average,” Ms Tan said.

Comparatively, the cattle market is holding steady with the benchmark Eastern Young Cattle Indicator closing early this week at 664c/kg carcass weight.