Lower saleyard prices feed export record

19 Nov, 2012 03:00 AM

OVERSEAS markets are lapping up Australia’s record cheaper supply of lamb but yardings and slaughter numbers are tipped to plateau to the end of 2012, market analysts say.

Volumes exported during October to the Middle East were up 79 per cent on 2011, China up 69pc, Papua New Guinea up 58pc and the United States up 25pc.

While total exports for October had been 18,574 tonnes shipped weight, the record had been driven by increased supply and cheaper product, reflected in saleyard prices to growers.

Overall, while the volume of Australian lamb exported was up 17pc on 2011, the value of those exports was down 4.3pc.

Rabobank senior animal proteins analyst Sarah Sivyer said exports had been higher because of increased supply in Australia, making our product more affordable on the international market.

“The number of lambs slaughtered in the first 10 months of 2012 is up 32pc on the same period last year. That’s the obvious thing,” Ms Sivyer said.

“The reduction in value (of exports) is being seen strongly in the US, which is Australia’s largest value export destination. From January to August 2012, export volumes have increased 6pc on the same time last year but the value of those exports has decreased 22pc.”

The slight lift in the Eastern States trade lamb indicator last week – up 3c/kg carcase weight to 351c/kg - was because of restockers coming back into the market.

She expected rain last week would see many producers hold onto sheep and lambs if conditions improved.

Meat and Livestock Australia chief economist Tim McRae said stock numbers coming through for slaughter were likely to plateau for the rest of the year.

He did not expect to see large yardings in November and December like there had been in 2011, which was part-seasonal and part-income pressure.

“Recent rain could provide some flexibility to hold on to numbers,” he said. “This year has been so far ahead of last year’s slaughter numbers, we may have seen some of the numbers come in early.”

He said while MLA had been expecting higher numbers in 2012 in markets and slaughterings, it was not expecting prices to fall as far as they did. The New Zealand export slowdown into the European Union was also unexpected.

“With the lower prices in saleyards, that’s been passed on into export markets to make the price of Australian product more competitive,” he said. “It has been reflected in prices but it’s effectively retaining demand for Australian product.”

Mr McRae said Australia needed to see more confidence in European markets for them to take more New Zealand product again. This would divert NZ product out of the Middle East and US markets, allowing more scope for Australian product.

But the economic signals in the EU continued to look tough.

“Overall demand into the US and EU will take a longer time to turn around,” he said.

Results from the MLA sheep producer survey – which concludes in a fortnight – will provide a better picture of numbers into early next year.

Date: Newest first | Oldest first


19/11/2012 10:30:45 PM

The old saying "make hay while the sun shines" holds true because lambs have had a very long run since the last price crash. Buyers had better make hay quickly because the higher returns from grain will very quickly see numbers of lambs diminish over the next several years; unless prices change upwards again. Farmers certainly do not get long to recover from a drought before something else comes along to shatter their hopes.


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Pleased that common sense has prevailed. Being close to the policy makers cannot be underestimated
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JohnCarpenter, The lamb and mutton job is going okay- we must be doing some things right.
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Spot on X. Let the Chinese buy as long as we can buy freely in China