Sheep stand tall on world market

30 Jul, 2010 04:00 AM
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Wellard Rural Exports managing director Steve Meerwald (right), was joined by a panel of guest speakers which included Kevin Bell (left), Murdoch University, Mal Edinger, Westcoast Wools, Sam Gill, Sheep Genetics Australia, David Pethick, Murdoch University, Hyfield studmaster Kevin Keatley and Independent Lab Services representative John Milton at the Wellard's field day in Kojonup last week. The
Wellard Rural Exports managing director Steve Meerwald (right), was joined by a panel of guest speakers which included Kevin Bell (left), Murdoch University, Mal Edinger, Westcoast Wools, Sam Gill, Sheep Genetics Australia, David Pethick, Murdoch University, Hyfield studmaster Kevin Keatley and Independent Lab Services representative John Milton at the Wellard's field day in Kojonup last week. The

THE future of the sheep industry looks strong if the message coming out of last week's Wellard field day at Hyfield, Kojonup, is on the money.

More than 80 producers attended the information afternoon and all left with a renewed hope for the future when it comes to running Merinos.

Speaking during the event Wellard Rural Exports managing director Steve Meerwald told producers sheep markets were at a place where they had never been before and there was enormous opportunity.

"Producers need to have confidence and reinvest in the sheep industry," he said. "These prices are here to stay and won't be crashing in the near future.

"If we have a crash it will be the result of not keeping production going.

"Sheep farming is certainly going to be sustainable and profitable for many years to come as we can't keep up with demand.

"Producers should have great confidence to invest in sheep and the industry for the long term as the demand for sheep meat is there.

"A big part of the world's population is now approaching the point where excess income is going towards purchasing protein."

The last time Australia's sheep flock was at 73 million was in 1905 when the world population was estimated at slightly less than two billion which meant a ratio of one sheep to every 27 people.

Today the world population is just under seven billion people meaning a ratio of one sheep to 96 people.

Mr Meerwald said these figures were the reason behind high prices for sheep.

"Although the world sheep flock has remained relatively stable for the last 25 to 30 years, the drop in numbers of the Australian and New Zealand flock, which are major suppliers of sheepmeat, has had an impact," he said.

"The Australian and New Zealand flocks, along with Uruguay, are the only flocks that have clean health status and surplus sheep to export."

Flocks in these countries had reduced by 50 to 65pc in the last 20 years.

Mr Meerwald said it was really a case of demand increasing globally for sheep meat compared to production which had reached maximum capacity.

"This increasing demand will limit the number of ewes that can be retained to increase breeding flocks in the future," Mr Meerwald said.

"For every additional lamb dropped now, there is already a market."

This meant that any increase in supply would be taken up by the increase in demand and as a result flock numbers would not increase in the near future.

In terms of global consumption, Mr Meerwald did not see this slowing anytime soon.

"A good way to consider what is happening globally is to look at China," Mr Meerwald said. "In 1961 China did not rate as a consumer of red meat, now it accounts for 20 per cent.

"If we look what is happening with their consumption and flock figures it gives us a good understanding worldwide.

"China is certainly reaching capacity as domestic and export demand is capping productivity."

The last 20 years had seen an over supply of sheep meat, but this had now dried up and any increase in demand would see an increase in price.

Mr Meerwald said the demand from the Middle East was still strong despite the higher prices as it was driven by cultural and religious reasons.

"Some are starting to question why they are paying double the price compared to a few years ago when the sheep today are two-thirds the weight," Mr Meerwald said.

"But the ships still keep going, although some buyers have started to source sheep from Africa and others are buying frozen products.

"We have been under price pressure for a while but the advantage we have is that we are closer to the markets, which means cheaper freight.

"The buyers are looking for value for weight because they want to get as many kilograms a head for their investment."

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In the subsidised race for market share $1/lt milk has a stable mate the cheese price wars
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The farmers are entitled to know that they will not be able to sell their milk at the end and
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I remember as a 15 year old learning the arcane art of starting a Lanz Bulldog tractor on