Low WA lamb prices not enough to tempt processors

Sheep and lamb processors in Victorian and NSW are not expected to be inundated with numbers from WA despite major price differences.

EASTERN states sheep and lamb processors are not expected to be inundated with numbers from Western Australia despite price differences of up to 50 per cent.

All WA lamb and sheep indicators are trading significantly lower than those in Victoria, with heavy discounts across the range of grades and weights.

The most significant difference is for mutton, which closed late last week in WA at just 219c/kg carcass weight, a hefty 53 per cent less than the Victorian rate of 465c/kg.

Yet the WA restocker lamb indicator closed at 367c/kg compared to Victoria at 621c/kg while the heavy lamb indicator in WA is 34 per cent lower than the Victorian rate.

Nutrien livestock operations manager Ron Rutledge said it was not as simple as comparing rates between west and east, with processors unlikely to take advantage of the cheaper WA rates.

“There are many issues with freight and logistics in getting lambs or sheep across to the eastern states,” Mr Rutledge said.

“Along with the costs comes the fact that processors have plenty of lambs around in the eastern states so while there might be an isolated load, it’s not going to be a big thing.

“And the thought of sending lambs 4000km to put them into saleyards or even sell over the hook just does not make sense.”

Plenty of lambs in the eastern states are expected to stop a flow across from Western Australia, even though the prices in WA are far cheaper. Picture: Jenny Kelly.

Australian Meat Industry Council chief executive officer Patrick Hutchinson said the organisation had not been told of any stock movements across the Nullarbor to processors but “they have occurred in the past”.

And he said he was unlikely for this to happen despite the price difference.

“There are quality control aspects to consider along with transportation costs which would make the process difficult,” Mr Hutchinson said.

In its weekly analysis of the prime markets, Meat and Livestock Australia noted the price differential between WA lambs and other states, noting processors were paying much less.

“WA trade lamb prices remain 100c/kg below the national benchmark – operating in the 500–600c/kg range,” MLA market information manager Stephen Bignell said.

This week’s lamb markets closed cheaper with all indicators shedding value.

The eastern states heavy lamb indicator closed on Monday at 699c/kg carcass weight, down 12c/kg in a week while the trade lamb indicator finished at 667c/kg carcass weight, back 5c/kg in the past seven days.