ANALYSTS are blaming the high Aussie dollar for a quick slip in sheep and mutton prices in the past fortnight and associated pain for exporters.
Subscribe now for unlimited access to all our agricultural news
across the nation
or signup to continue reading
But processors say it’s supply – as much as the dollar – that’s holding back exports.
Annual store sales at the NSW towns of Hay, West Wyalong, Balranald, Jerilderie and Condobolin in the past few weeks have all recorded good results, but not to the peaks of sales earlier in the year.
At Narromine’s monster store sheep sale last week, where 32,000 head were yarded, average prices were back compared to the previous month’s sale, but still strong when compared to past years.
Mudgee farmer, Malcolm Jacobsen, “Merrywether”, bought the top-priced pen of first-cross ewes for $225 but said had they been sold a few weeks earlier they might have been $40 to $50 dearer.
The national mutton indicator has also slumped 22 per cent since its peak in June, however, the value of mutton is still historically high.
National Livestock Reporting Service (NLRS) figures show this year mutton prices have been between 50pc and 74pc higher than the corresponding monthly five-year average.
At the same time, supply has been back about 30pc year-on-year, and this has been spurred on by the better season which has slowed sheep turn off, particularly in NSW (back 40pc) and South Australia (back 39pc) according to NLRS.
Last week slaughter figures were up 58pc compared to the week before, but still down 43pc when compared to the same time last year.
And this is causing a major headache for exporters trying to keep a consistent flow of product up to hungry overseas customers.
The situation has prompted the Southern Meats principal, Neville Newton, of the Goulburn-based export company, to declare that it’s “showtime” for the industry, but he believed the market and processing sectors would find their level in dealing with reduced sheep numbers.
“I think the volume of kill at the moment is down something like 100,000 a week; now that tells you in a nutshell,” Mr Newton said.
“There’s too much slaughtering capacity out there for the number of animals available to slaughter.
“There’s got to be some form of industry rationalisation.
“There are people who have had visions of all these grand volumes of meat they’re going to sell. I don’t think some of them have really done their sums, because when you look at it we’ve only got 70 million total sheep and lambs in Australia today.
“People quite frankly have to organise their businesses in such a way to handle these lower volumes.”
Last year Australia exported 133,979 tonnes (shipped weight) of mutton – and that’s a long way in front of the totals so far this year.
Year-to-date exports are sitting at 69,547t, compared to 98,329t for the same nine-month period last year, according to data from Australian Meat Industry Council (AMIC).
In September mutton exports were down to 7790t, compared to 10,325t for the same period last year.
AMIC national processing director, Stephen Martyn, Sydney, said mutton exports were down because of reduced flock numbers and farmers rebuilding numbers.
“Of available production for export, most has been going to the Middle East because of the strong demand,” he said.
“The processing sector is doing it hard with a lack of supply, and currency that’s heading toward parity with the US, they’re doing it tough,” Mr Martyn said.
