The downside of a run of good seasons plays out with prices

Years of good seasons and high livestock prices have meant bigger numbers of sheep and cattle — but now the high numbers are biting back.

The fallout from a run of three good seasons and the resulting herd and flock rebuilds continue to play out in livestock prices across the nation.

In a classic case of supply and demand, bigger kill numbers have pushed prices down as processors are spoiled for choice for cattle, lambs and sheep.

Meat and Livestock Australia senior market information analyst Ripley Atkinson said finished cattle and lamb prices “remain pressured”.

“A strong supply of finished cows continues to be turned off based on age, with producers choosing to retain younger females,” Mr Atkinson said.

“Evidently, supply of processor stock remains strong, with national slaughter numbers reaching their highest level since 2020 last week.”

Action at the most recent Mortlake store sale.

In a similar scenario, lamb prices have also felt the heat of bigger numbers, and saleyard rates fell as processors secured their needs direct from producers.

“This high supply of lambs, which have been mostly held back due to wet conditions from last year’s spring flush, has provided processors with large supplies and the luxury of choice,” he said.

Meanwhile, figures just released by the Australian Bureau of Statistics for the March quarter show kill numbers have been up with a 10 per cent lift in red meat production, but the total value of that extra production was down.

In the three-month period from January to March, beef production was up 11.3 per cent to 524,335 tonnes but the gross value was down 4.7 per cent to $3.4 billion.

It was a similar story for mutton where production as up 31.8 per cent and lamb up 4.6 per cent, but the gross value dipped 5.8 per cent to $1.2 billion.

And while the dip in rates earlier in the year may have caused some producers to take stock, it appears restocking was still on the agenda early this year.

Episode 3 director Matt Dalgleish said the ABS statistics showed the female slaughter ratio – a gauge of whether the herd was rebuilding or liquidating – was up slightly but not significantly.

“The FSR shows a slight uptick from the December 2022 quarter from 42.1 per cent to 42.4 per cent,” Mr Dalgleish said.

“This is still well below the threshold of 47 per cent, a figure which signifies we are in rebuild mode or liquidation phase for the Australian herd.

“A look at the seasonal trend in the FSR from 2022 to 2023 shows that while we are still in pretty strong rebuild territory, we have started 2023 with a higher FSR than the 40.8 per cent recorded for the March quarter of 2022, indicating that the enthusiasm to restock is not as strong this season compared to last year.”