AUSTRALIAN sheep farmers are cashing in on historic meat and wool prices, as average farm income for the sector hits a 20-year high of $170,000 this financial year.
Figures from Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) released on Tuesday, show sheep producers received an estimated 35 per cent pay rise, on the back of 6pc rise in saleyard prices for lamb and a lucrative 15pc spike in wool prices.
The hero of sheep farmers’ pay rise is wool’s significant growth in prices.
In 2017-18 the Australian Eastern Market Indicator (EMI) wool price was forecast to average 1630 cents a kilogram.
This marks the highest annual price since the 1989-90 average of 1955c/kg (in today’s dollar value) but would not be a record in real terms.
Wool price is forecast to continue rising but remain below record levels, with this year’s rise 16 per cent below the 1947c/kg average of the 1970s-1980s, and 38pc below the 2612c/kg average in 1987-88 (in 2017-18 dollars).
The five-year outlook forecasts wool production to reach 456,000 tonnes by 2022-23, while wool exports are projected to increase to $5.1 billion, driven by sustained demand for superfine wool.
On the meat side, strong demand in major export markets, particularly China, will continue to drive restockers and processors battle for supply and influence a further rise in lamb prices to average 625c a kilogram and 440c/kg for sheep this financial year.
In the future, lamb prices are projected to decline to average 576c/kg and saleyard sheep prices to average 426c/kg by 2022-23.
Farmers move to capitalise on the current historic high prices of lamb, combined with dry seasonal conditions, slowed the national flock rebuild that has stagnated at an estimated 70.5 million head.
The five-year outlook, forecasts sheep numbers to reach 75 million head but 2022-23, at about 1pc per year.
The value of Australian sheepmeat exports is estimated to rise 12pc to hit $3 billion, reflecting the higher unit values and a 7pc increase in export volume to 419,000 tonnes (shipped weight).
Ongoing flock expansion is anticipated to influence a 20pc rise in sheepmeat exports from 430,000t in 2018-19 to 514,000t in 2022-23.
Australia’s three biggest export markets for sheepmeat – United States, Middle East and China – account for 65pc of trade.
With lamb accounting for about two-thirds of the country’s sheepmeat exports, the value of the nation’s sheepmeat exports is expected to hit $3.5b in 2022-23.
Strong wool prices are expected to influence sheep prices, which are forecast to remain at historic highs.
