Strong incentives for WA lamb producers

31 Jul, 2010 04:00 AM
The message from Murdoch University Professor David Pethick at the Wellard field day in Kojonup last week was simple: keep producing more sheep and make every lamb count.
The message from Murdoch University Professor David Pethick at the Wellard field day in Kojonup last week was simple: keep producing more sheep and make every lamb count.

WITH strong market indicators for lamb and mutton the message from Murdoch University Professor David Pethick at last week's Wellard field day, was to keep producing sheep and make every lamb count.

Professor Pethick said lamb had come a long way in Australia and the humble lamb chop was now associated with up-market culture.

"Lamb is adored and loved in Australia, because of the good job MLA has done with marketing," Professor Pethick said.

The results of MLA's marketing can be seen by the expenditure on lamb by Australian consumers in the last 10 years, which had doubled to reach $2.3 billion in 2009.

Professor Pethick said this increase was not due to increased consumption, as consumption levels had not changed but rather retail pull and buyers being prepared to pay for a quality product.

The story for the industry was even better when you looked at lamb exports which had quadrupled over the last 10 years to reach nearly 200,000 tonnes valued at $996 million in 2009.

Professor Pethick said the value of lamb exports was climbing and it hadn't been hit by the high Australian dollar.

Australian lamb exports to the United States were up by two per cent, while exports to the Middle East were up by eight per cent.

The Middle East market, in terms of lamb exports, was going "gang busters".

"It is very strong for both the live and dead product and is now a very sophisticated market," Professor Pethick said. "When you consider these figures it really is a good story for lamb."

This strong demand coupled with low supply has had a positive result in terms of prices for producers.

Professor Pethick said when you looked at the figures from MLA's National Livestock Reporting Service, saleyard prices had gone through the roof.

The May national trade lamb price averaged 505c/kg, which was up eight per cent on last year and 34pc on the five year average, while mutton prices averaged 385c/kg up 52pc on last year and 94pc on the five year average.

Professor Pethick said compared to beef, mutton was "creaming it presently".

Last week the national Eastern Young Cattle Indicator was at 358.25c/kg carcase weight compared to mutton at 413c/kg carcase weight.

"These types of figures have never been seen before and will be around for some time as a result of flock numbers," he said.

The MLA had reported the national sheep flock would stabilise in future years and it expected a slower rate of decline in 2010.

It estimates the flock will fall by two per cent to 69.9 million in 2010 while mutton kill rates were now dropping.

"We all know sheep numbers are at very low levels and we need to produce more lambs," Professor Pethick said. "In fact the industry has done a good job and over the last few years we have been producing more lamb year on year in terms of weight.

"Producers have increased carcase weights and as a result productivity has been up by 37pc."

Lamb production is forecast to rise by two per cent in 2010 and over the next five years by 13pc.

Professor Pethick said producers needed to make sure every lamb they produced satisifed consumer demands.

"That means producers managing nutrition, managing compliance and yield and managing costs of production, to ensure the industry remains strong," he said.

To ensure the industry stayed at these high levels the industry must deliver on what consumers wanted in terms of eating quality and yields.

"We must focus our marketing on the leanness and healthy aspects of lamb and in terms of genetic improvement, producers must increase growth rate, optimum fat, improve muscling and better marking percentages," Professor Pethick said.

"We have to continue to deliver what the customer wants and if it is a good product they will keep coming back."

Another key attribute Professor Pethick considered crucial for the future was lean meat yield and already in WA there were good market signals from processors.

Professor Pethick said to improve lean meat yield, carcase weight and carcase composition needed to be improved which all went back to growth, fat and muscle.

"So choosing the right sire is critical," he said.

"Growth is king and is good, as high growth rates mean more weight-for-age and earlier turn-offs.

"But you need to pay attention to birthweight and lambing ease.

"In terms of muscle, it is the future and a no-brainer for all sheep breeders.

"Muscle equals lean meat yield, but it is also helps with the glycogen story (dark cutters), milk and worm egg counts.

"A positive muscle measurement coupled with negative fat is better for the feed efficiency in growing lambs as well."

Another key to ensuring consumer satisfaction in the future would be to maintain the eating quality of lamb, which related back to balancing yield and intramuscular fat.

This can now be done, with breeding values soon being released for intra muscular fat and tenderness, as they are heritable.

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2/08/2010 7:10:54 AM, on Farm Weekly

I am amazed at what actually get's written in rural newspapers these days. If you aren't going to tell it how it is then don't tell it at all. Quotes like the USD$ hasn't effected exports. This could not be further from the truth. The largest market for Australian lamb is North America and there is massive resistance to Australian lamb prices at the moment and demand has almost ceased in the last 1-2 months. Lamb has got too expensive. Even domestically there is now resistance to the current lamb prices. Ask the two big supermarkets. See how their numbers are fairing on turn over. Lamb has become exactly that, it is a luxury item and people just won't continue to pay high prices for it if our other proteins are cheaper eg. pork and chicken and shortly beef will be as well. I would love to see where the MLA gets all their figures from but they are very out of date. The Chinese market which they put up in lights is a drop in the ocean compared to North America in terms of what they take. China has only really been a buyer of secondary cuts. You can't successfully sell elsewhere at a reasonable return. They are not big buyers of the primal cuts and this is what gives you the return.


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