Restocking demand forces national slaughter rate down

Grass fever demand forces national slaughter rate down

Stock and Land Beef
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Slaughter figures are well down on the same time last year.

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LOOKING AHEAD: Lamb producer Tim Leeming, Pigeon Ponds, says supplementary feed costs will most likely ease following a good start to autumn.

LOOKING AHEAD: Lamb producer Tim Leeming, Pigeon Ponds, says supplementary feed costs will most likely ease following a good start to autumn.

Victorians are opting to hold onto excess breeding stock on the back of a strong autumn start, as hungry NSW and Queensland producers look to southern Australia to restock.

Decisions to hold is pressuring the national slaughter rate to continue to fall, while the promising start to autumn is also expected to reduce supplementary feed costs in the coming months as producers take advantage of the high livestock returns.

According to Meat & Livestock Australia's latest data by the National Livestock Reporting Service, sheep slaughter fell by 33 per cent year-on-year in March, down to 558,443 head.

Lamb slaughter rates also eased, dropping 12pc year-on-year to 1.73 million head believed to be a flow-on effects of drought, including poor lambing resultsand higher kill rates in 2019.

South-west Victoria lamb producer and livestock consultant Tim Leeming, Pigeon Ponds, said strong restocking demand by NSW and Queensland and a good autumn start for Victoria were contributing factors to the drop in slaughter rates.

"We're in a scenario that we haven't really suffered any wrath from COVID-19 and both the beef and sheep market are insulated because of the restocking demand," Mr Leeming said.

But could high prices and the demand by exporters be short lived?

Lamb exports fell by 18pc in April year-on-year, reaching 22,643 tonnes shipped weight, following almost unprecedented demand by China following a depleted pork herd in 2019 due to the African swine fever. Beef also exports dropped 6pc to 92,476 tonnes swt.

"It would be naive to not expect a reduction in spring sheep meat prices for mutton and lamb," he said.

"But at the same time, as a result of the good season and the prospects of a big harvest, I would anticipate there will be surplus hay and grain which will lead to a reduction in fodder costs towards the end of the year."

Mr Leeming said the prices being paid for red meat laid the foundations for on-farm investment of infrastructure and sow new or renovate existing pastures.

Market analysts Mecardo report both slaughter and yarding rates across eastern Australia are well below average on recent years, signifying reduced availability of breeding ewes and farmers' decisions to rebuild.

Data from online selling platform AuctionsPlus indicates recent rainfall across eastern Australia has boosted interstate demand for Victorian sheep, in particular breeding ewes.

In the first four months of 2020, nearly 40,000 Victorian-bred ewes were purchased by interstate producers, compared to just 26,851 head bought during the same period last year.

"Stock movements for 2020 has shown that buyers are not afraid to purchase stock outside of their regions and states," AuctionsPlus market operator Teeah Bungey said.

Rodwells Wimmera manager Wayne Driscoll said sheep numbers in western Victoria were fairly stable in the first four months of 2020.

"The drop in slaughter rate is a direct response to the decline in the flock population and as the flock population has reduced due to drought and the sell-down, it hasn't been replaced," he said.

"The national flock may take five years to rebuild to what it was pre-drought but even then, variable farming practices such as cropping could prove difficult."

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