Out-of-control lamb and sheep prices have claimed a major export casualty with the seasonal closure announced Monday of the Castricum Brothers, Dandenong lamb processing plant.
Difficulties with supply have been blamed for the shutdown – a closure expected to last for three months pending a review of trading conditions at that time.
In a prepared state, Castricum general manager Gary Castricum cited also the spiralling Australian dollar against the US and other major trading currencies as a contributing factor.
He said this factor had forced exporters to pursue large price increases overseas for lamb which has made it very expensive compared to other meats.
The move he says has encountered significant market resistance which had made it very difficult for lamb exporters especially when more than half of nation’s lamb production is consumed locally and is unaffected by currency fluctuations.
Mr Castricum stated the huge spike in recent livestock prices to above $5 per kilogram had produced a level of costs unsustainable for exporters.
This fact was reinforced by other export lamb processors this week who said if prices were not returned to around $4.50/kg further closures were imminent.
Melbourne based, Australian Lamb Company joint principal John Verrall has confirmed that times were not glowing for exporters.
“Export processors must be loosing $20/head on each lamb produced at last week’s saleyard money” he said.
“We’re happy in the fact producers are getting rewarded for lamb” Mr Verrall said. But it is not a bottomless pit and if there is not some price relief in saleyard prices fairly shortly ALC is headed in the same direction as Castricum”.
While the Castricum announcement was half expected by some, the news Tuesday that Armidale, NSW-based lamb exporter Country Fresh Australasia had sold its entire business - two abattoirs, two overseas meat sales offices and a domestic distribution centre to Adelaide’s T&R Pastoral has court many off guard.
T & R Pastoral general manager Darren Thomas told Stock & Land the industry was navigating tough times and structural change would continue as the Australian sheep flock numbers stabilize and hopefully rebuilt.
“T&R is excited about the opportunities that lay ahead” Mt Thomas said.
“The acquisition displays great commitment to rural Australia in a time when processing plants are closing”.
