The average price for a trade lamb, 18 to 22 kilograms, sold through the saleyards in Australia for the year currently sits at 682 cents a kilogram carcase weight.
For mutton with a very similar weight classification (18-24kg), it is 443c/kg.
This equates to a 20kg lamb carcase returning $136.40 a head, and a 20kg mutton carcase returning $88.60, a difference of nearly $50.
When the age, and according to Meat & Livestock Australia (MLA), the eating quality, can be exactly the same for both products, that’s quite a price divide.
But with many dedicated prime lamb producers turning off their product at under six months of age, and most lambs not cutting their teeth until upwards of 10 months of age, questions have been raised as to what benefit the change will have on-farm, and if in fact it could increase supply, negatively impacting prices.
The discount producers face for a lamb left in the paddock just one week too long could be a thing of the past however, as last month, Agriculture Minister David Littleproud announced he would change the definition of lamb for export purposes.
The change, which allow animals to continue to be labelled lamb after they break their first teeth but before those teeth show any wear, will mean amending the Export Control (Meat and Meat Products) Orders 2005.
It will put the export legislation in line with the New Zealand definition, and the new AUS-MEAT definition, Mr Littleproud said.
"After decades of discussion, the time for talk was over,” he said.
“This is a simple common-sense change.
"This will mean our growers can sell more lambs towards the end of the growing season and expand their lamb export opportunities.
"It will be easy for growers to see when a lamb becomes a sheep – when there is visible wear on the incisors."
Sheep Producers Australia (SPA) has been a firm advocate of the change, and said a nine-week public consultation in early 2018 showed 83 per cent of industry surveyed were behind the change.
“With the Minister’s announcement that the government will support the industry’s decision with a quick response to change, we anticipate the new definition should be in place in mid-2019,” SPA chair Chris Mirams said.
“The new definition will even the playing field with New Zealand in our export markets and provide producers with an indicator before they incur the ‘price cliff face’ of lamb being downgraded to hogget or mutton.”
MLA said that peer review research published in 2005 studied three different flocks – Merino, first-cross and second-cross, and found that ‘older’ lambs, which had partial or full teeth erupted, “was as acceptable, if not better, than meat from young lambs with only milk teeth”.
Achieve Ag Solutions director Nathan Scott said while he expected the change to have little impact on true prime lamb producers, those selling lambs from a Merino base could see an upside
“The main ones who will benefit will be the Merino producers, with first-cross lambs who tend to take a bit longer to get up to weight anyway…and pure Merino lambs as well which are more likely to be in that 10 to 12 month window,” Mr Scott said.
“For most true prime lamb producers, it won’t have that much of an impact because if they are producing lambs with any good genetic merit, then their growth rates should see them well outside the grid (weights) by the time they are cutting teeth.
“So the main winners are those that are using Merino ewes, and I think that is a good thing, as we know eating quality is still very good in lambs just cutting teeth, so there is no downside for anyone, it just means more product available that still matches quality expectations of the consumer.”
With processors previously reporting an increasing volume of lambs being too heavy for the grid, Mr Scott said buyers were “rolling the dice” on those lots at the saleyards regardless of the pen having cut teeth or not.
“It is up to processors to push back and discount heavy lambs, they do it over the hooks so they need to do it better in the saleyards, but it is a lack of numbers, when they need numbers they are willing to roll the dice on some of those,” he said.
Victorian Farmers Federation livestock president Leonard Vallance said while the decision had been made, there were still two differing points of view in the industry.
“The prime lamb producer that invests in genetics and high quality feed regimes on their property and turns lambs off at weight before breaking their teeth won’t gain anything,” Mr Vallance said.
“The farmers that are unable to meet carcase weight before they break teeth, the abattoirs (buying those lambs) will have a benefit there and that is why there is such a division between producers.
“A good way to keep the price of product up is to have a shortage; is this going to increase the number of animals defined as lamb on the market? Yes it will.”
Mr Vallance added that with all indicators pointing to lamb prices being historically high in 2019 because of a shortage of supply, the market impact might take some time to be visible to industry.
Australian Lamb Company livestock manager Ben Verrall said he was 110pc behind the change, and he wished it had have happened 10 years ago.
“It is going to assist us for lambs we purchase from feedlotters, they will have an extra 20-30 days to finish them without coping the discount,” Mr Verrall said.
“If we buy lambs out of saleyards on a Monday and kill them on a Wednesday, we get 10-20 hoggets over that period, we can’t claim them back because they might have cut them in the 24 hours after purchase, so that is also going to assist us.
“What people will have to be cautious of is holding them too long – don’t stretch it too far and get one more set of teeth and end up with mutton.”
Mr Verrall said segregating hoggets out of a lamb run during processing was costly, and impacted production requirements when it came to filling orders for the day.
“It puts us on a level playing field with New Zealand, our biggest competitor.”
Colac lamb producer Will Hanson says while the change in definition won’t impact his business directly, he thinks it is positive for the industry.
Mr Hanson, and wife Kate, run 3500 self-replacing composite ewes on ‘Narcombie’, turning off about 2000 lambs annually direct to Australian Lamb Company.
“It probably won’t influence us a lot because a lot of our lambs are well and truly gone before they have two teeth, but if you have producers wanting to produce older, bigger, export lambs it is a good thing, it may open up some market opportunities, because you get a fair whack for having two teeth,” he said.
Mr Hanson said while most lambs were cutting two teeth at 12 months of age, their youngest lambs were being sold off at 16 weeks.
“But some of those big northern guys lambing in the autumn and selling at the end of spring, they might have carry over lambs that are getting close to two teeth – being able to sell lambs as lambs a little bit later gives bigger scope for the market,” he said.
And he wasn’t worried about a potential increase in supply of stock fitting the lamb category, as having animals still classified as lambs at heavier weights had the potential to open up more markets, and therefore competition.
The Hansons have been producing lamb for the domestic market with a carcase weight of 20 kilograms, but are in the process of changing their system to make better use of early winter feed.
“We are pushing lambing back six weeks, to then aim for more kilograms of lamb out of the same number of sheep at the same time of year,” Mr Hanson said.
“Instead of 16 weeks, they will be six weeks older and heavier and we would have produced that out of the same number of ewes.
“We want to produce a few more kilograms by having bigger lambs, as well as maintain our marking and scanning rates, and I think we can do that by just changing a few things up.”
Use of electronic identification tags and analysis of the data collected, as well as evaluation of recent seasonal outcomes, has been behind the decision to make some changes on-farm, Mr Hanson said.
“We have been lambing in July-August, but growing quite a good amount of feed through June, and late May, and one thing we have learnt from eID is from lambs born to weaning at 10 to 12 weeks, we get really good growth rates during that period,” he said.
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