Saleyard prices continue to return record margins for Australian sheep and lamb growers, despite COVID related supply chain issues.
Prices have continued to track above the 10-year average with restocker lamb performing particularly well.
“The current National Restocker Lamb Indicator (NRLI) is priced 49 per cent or 292c/kg carcase weight (cwt) higher than the 10-year average,” said Ripley Anderson, market information analyst for Meat and Livestock Australia.
Mr Anderson said that the strong demand and ideal seasonal conditions would outweigh issues caused by disruptions to supply chains.
“I know people are worried about the market dropping 20c or $10 per head because there aren’t as many processors operating at the yards, but the market is in a good position.”
“Obviously that supply and demand situation will play out and that increase in supply may place downward pressure on the market, but prices comparatively to the long-term will remain favourable,” he added.
Live Exporters Hope to Decrease Moratorium
The Australian Livestock Exporters Council is looking to increase shipments of live sheep to the Middle East by testing new technologies to safeguard sheep from heat stress.
A moratorium currently restricts the shipment of livestock to the Middle East between June and September each year, but improved animal welfare standards have seen the mortality rate drop to 0.2 per cent since the Awassi Express disaster in 2017.
Mark Harvey-Sutton, chief executive officer of the Australian Livestock Exporters Council said that the industry needs the opportunity to re-examine live exports during the northern hemisphere in summer to retain a competitive advantage.
“We must take every opportunity to maximise shipping opportunities when it is safe to do so from an animal welfare perspective,” he said.
“However, we would be doing both our trading partners and Australian sheep producers a disservice if we do not ensure prohibition timeframes are proportionate to risk, based on evidence and science.”
Restocking Price Pressure Begins to Show
The Eastern Young Cattle Indicator (EYCI) has shown strong signs of softening market conditions amid caution from buyers looking to restock.
Within a week, the indicator dropped from almost 1200 cents a kilogram carcase weight level to 1112 cents – a decline of 7 per cent.
Strong supply and cautious buyers are putting pressure on prices, with analysts predicting the price will drop to 998 cents per kilogram by the end of June. The downward trajectory could continue throughout the year amid a predicted growth in the national cattle herd by 1.1 million to 27.2 million.
Meat and Livestock Australia has also forecast an increase in the slaughter figure by 11 per cent, driven by increased supply.
The local beef industry will perhaps be reassured by the global market as the price for Australian beef went up by US10 cents per pound in just two weeks.
The price currently sits at a high of US308 cents per pound, with industry analysts predicting it will continue to grow if the American cattle stocks decline.
The trend is driven by climate factors at both ends of the world – favourable seasonal conditions in Australia fill the gaps caused by drought conditions in the States.