WITH sheep flock numbers still dropping, the WA sheep industry is looking attractive, according to Fletchers International Narrikup abattoir general manager Greg Cross.
Prices over the past 12 months had remained attractive for farmers, despite withdrawing from the outstanding levels of 2014, Mr Cross said.
Elders Muchea Livestock Centre trading prices showed shipping wethers had on average traded higher than the previous year, especially into June, at $95-$100 compared to last year's average of $80-$90.
Despite mutton trading lower all year, recent prices were dearer at $340 cents/kilogram, compared to $300c/kg for the same time as last year.
After 33 years in the industry Mr Cross said he had never seen such consistent prices.
"As a processor I think the prices have been attractive, and I don't see them going south," he said.
"In terms of exports, the demand is there for protein and WA produce."
Mr Cross said in the past 12 months WA producers had received solid prices.
"If farmers aren't doing well now, they probably never will," he said.
"The prices have been consistently up over the past five years, there has not been the massive highs and lows we have previously experienced."
In terms of global demand, WA was still well placed.
The Chinese, European, North American and Middle Eastern markets continued to be a big driver.
This is despite the downward movement of the Australian dollar and competition on a global scale.
"The demand for exports is still strong," Mr Cross said.
"The demand for protein and WA protein is strong, and where we are geographically situated is a big attraction, as we are well located for our export markets."
According to Meat and Livestock Australia's (MLA) updated Sheep Industry projections, Australian lamb exports in 2016 were forecast to be fairly steady with the past two years, at 235,000 tonnes shipped weight, before gradually growing with production to 280,000tsw by 2020.
After a faster than expected start to the year, Australian lamb slaughter was revised three per cent higher from the December forecast, to 22 million head but still 3pc below the 2015 record high.
As a result of the higher throughput in the first quarter, tighter availability is anticipated during winter, before new season supplies ramp up in the final months of the year with Victoria, South Australia and WA expected to be most noticeable.
MLA reported that lamb shipments to China so far this year were slightly ahead of year-ago levels, but mutton exports were sluggish.
"The Chinese sheep meat market reportedly remained sluggish as the result of on-going high stocks," MLA reported.
The Department of Agriculture and Food 2016 Sheep Notes state the total turnoff for 2014/15 reached 5.5m head, down from 5.9m in 2013/14.
This included 1.3m sheep slaughtered, 2.4m lambs slaughtered, 1.8m sheep exported live and 43,500 sheep transferred interstate.
In March, the heavy lamb over the hooks indicator averaged 520c/kg, the heavy lamb saleyard indicator averaged 469c/kg, the mutton over the hooks indicator averaged 247c/kg and the mutton saleyard indicator averaged 226c/kg.
"The value of WA sheep meat exports has grown considerably since 2012," the report stated.
"The value of lamb exports has increased 120pc since 2012 and the value of mutton exports has grown 63pc to $111m."
The WA sheep flock was estimated to contain 14m sheep and lambs as of July 1 2015, this included 7.5m breeding ewes.
The lack of numbers is starting to show at the saleyards.
Katanning saleyards manager Rod Bushell said he had noticed the effect of WA sheep numbers decreasing.
"We would average 20,000 a week normally, but this year we have averaged about 14,000 to 15,000," he said.
"I can't see the numbers getting back up there soon as they have been backing off over the past five to 10 years."
Mr Bushell said the decrease in numbers had also been caused by the good season.
"Numbers had dropped of substantially in the past few months due to the recent rains," he said.
"People have been holding onto their sheep due to good feed."
While the WA flock was of concern, MLA reported the national average sheep carcase weight had been steadily increasing over the past decade, largely due to advancing genetics and ewe management programs.
MLA said 2016 was no exception.
"Despite tough seasonal conditions across many of the key producing regions over summer, the Australian sheep carcase weight was forecast to average 23.7kg/head this year," MLA reported.
Mr Bushell was also optimistic about this coming spring.
"I think it will be quiet until then, but I think prices will still be good," he said.
"Breeding ewes will definitely take a big jump come October and lambs are about $5c/kg, so I think those prices could be maintained or even get better.
"The demand is there, especially for breeding stock.
"We had an ordinary season last year and had a fair bit of stock being turned off. But I think this year is looking a lot better.
"I don't think we will get to those high prices of 2014 but it is looking very positive going forward.
"We have had the third wettest year on record for Kojonup and prices look to be positive."
From a processors' point of view, Mr Cross said while it was a copy-paste situation from last year, it seemed more attractive as the South West had a large amount of rain.
"There are some pockets that copped the short straw, but broadly across the State it has been very good," he said.
"This has been a positive, as spring lambs will be earlier than last year."
While the season had been good for lamb producers, processors were still feeling the squeeze.
Mr Cross said Fletchers could process 1.2m head a year easily as supply was down across the State.
"The costs just keep going up," he said.
"If prices are going to stay on the upside, it is up to the processors to look at their efficiencies and ensure their operations are cost effective.
"Processors at the moment are running at half pace."
