Restocking interest drying up on talk of tough season, prices

Record exports and a lift in domestic consumption have failed to stimulate sheep and lamb prices as mutton falls to its lowest level for a decade.

Record exports and a lift in domestic consumption have failed to stimulate sheep and lamb prices as mutton falls to its lowest level for a decade.

Processors exported a record 31,799 tonnes of lamb in August, a hike of 21 per cent on the same time last year as supplies surge.

And Australians are eating more lamb too, with a 12.4 per cent increase in the volume bought after a 12.4 per cent decrease in prices.

Meat and Livestock Australia marketing and insights general manager Nathan Low said lamb sales had spiked in recent months on the back of falling prices.

“The price reduction is translating to increased purchasing frequency for several cuts,” Mr Low said.

“This is especially the case for the most popular cuts like lamb legs and chops, which are up 20 per cent compared to one year ago.”

But record exports and more lamb in Australian shopping trolleys are cold comfort to sheep producers who are facing their lowest returns in decades.

Lamb indicators are showing the true story of just how far the market has fallen. Picture: Nikki Reynolds

The lamb market was up slightly on Monday, with the national trade indicator closing at 445c/kg, up 2c/kg after sales early this week but still 43 per cent lower than a year ago.

And the story is even worse for mutton, with this week’s national indicator closing on Monday at 128c/kg, 75 per cent per cent lower than a year ago and falling to levels not seen since February, 2013.

The low prices are starting to impact on producer confidence, curtailing restocking of replacement sheep and rams.

Rams are selling but clearances are back as some producers lose confidence in the sheep industry.

Ram sales monitored by The Weekly Times for September show a clearance rate of about 80 per cent. One vendor, who did not wish to be named, said his clearance had slipped to about 60 per cent after a total sellout last year.

At Hillston on Monday, the top Merino ewes sold for $200, about half what they made a year ago, reflecting the apathy around sheep production this spring.

While auctioneers pleaded that “it is not where we are now, it’s where we are in four years”, Monday’s sale failed to show any signs of the competition seen in the past few years.

Barellan, NSW, agent Mark Flagg said he had never felt so much negativity around sheep.

“People just don’t want to buy sheep,” Mr Flagg said.

“If they have cropping as well, they probably won’t increase that area (growing crops) but might just cut out sheep altogether.”

Ram vendor Simon Bahr from Henty, NSW, sold Merino rams last week to $4750 but passed some in, and described the challenges facing the sheep market as “the perfect storm”.

“We’ve got bigger numbers (of sheep and lambs) and dry conditions and it’s caused a saturated market,” Mr Bahr said.

“If we had a good season across eastern Australia, I don’t think the price falls would have been so dramatic.”