A year of records and demand for sheep

A year of records and demand for sheep


Sheep
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AUSTRALIA’s live sheep export industry continued its solid performance in 2017 with the total number exported at 1,651,314 head at the end of November.

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WA sheep producers had it good both ways in 2017 with record wool prices and high lamb prices. Export wethers have also sold well. There is recognition of a need to increase the flock size in WA from 14 million head but increased demand for WA stock in the Eastern States, which is good for producers who have struggled with seasonal conditions, may delay the rebuild process.

WA sheep producers had it good both ways in 2017 with record wool prices and high lamb prices. Export wethers have also sold well. There is recognition of a need to increase the flock size in WA from 14 million head but increased demand for WA stock in the Eastern States, which is good for producers who have struggled with seasonal conditions, may delay the rebuild process.

AUSTRALIA’s live sheep export industry continued its solid performance in 2017 with the total number exported at 1,651,314 head at the end of November.

Usually sheep export numbers average about two million head.

Fremantle remained the dominant port for the trade with 1,373,669 sheep exported to the end of November last year.

A solid 216,295 left Fremantle in November alone.

Qatar made its move as the leading market for the trade after receiving 560,000 head in 2017.

Kuwait saw 535,479 sheep arrive which, while still a significant number, was a continuation of its downward trend from about 1.2 million head in 2003.

Compared to the 2016 prices, shipping wethers remained strong throughout 2017 with the price rising to $100-$110 per head at the end of 2017 according to the Elders Muchea market report.

This was about $15 per head above the price offered for December, 2016.

Elders Katanning market report in December showed that “wethers to live export were up $8 per head selling for $88-$136 per head and from $90-$133 per head for slaughter”.

“Lambs to live export remained firm selling for $80-110 per head.”

Landmark Katanning also recorded higher prices with the best export “heavy wethers selling up to $120” and at Muchea heavyweight wethers sold to exporters to a top of $132 – with a line of 347 head making $130.

Sheep exports are worth about $250 million a year to Australia and with the vast majority coming out of WA, it is good for the local economy.

Despite the WA flock having been reduced from 40m to 14m head since the 1980s the industry has a bright future.

Record wool prices dominated headlines over recent months as demand rose – topping at 1842 cents a kilogram clean in December.

Lamb prices have been strong all year and finished the year 130c/kg above the December, 2016 figures – to 630c/kg at Muchea.

Mutton prices were also above 2016 prices for the year and were sitting about 410c/kg at the end of 2017.

Last year has seen strong interest at ram sales and a trend for higher prices on average.

A sky-rocketing wool market and solid sheep prices had buyers exuding confidence and ready to invest big at last year’s Merino ram sales.

With five years of rising wool prices behind them, producers who have stuck with Merinos were now reaping the rewards and showed they were prepared to invest heavily in Merino genetics in 2017 by pushing prices at Merino sales to record levels for a third consecutive year.

After averaging more than $1200 for the first time in 2015 and then more than $1300 in 2016, it was certainly a case of records are made to be broken with the average across all Merino sales falling just shy of $1550 in 2017.

With another significant rise in the wool market last year and strengthening sheep prices, it has meant the value of Merinos has gone through the roof and they are now regarded as a must-have commodity.

In the past five years there has been a significant upward movement in wool prices – in the 2012/13 wool selling season the Western Market Indicator (WMI) averaged 1058c/kg clean and last season (2016/17) it averaged 1454c/kg, meaning it has risen 396c/kg (37 per cent) over the past five seasons.

By the time the last Merino ram sale was held, there had been a total of 9779 rams offered at 76 auction sales.

This was broken into 63 single vendor sales and 13 multi-vendor sales which saw a total of 9220 rams sold under the hammer.

The 2016 season saw 9443 rams offered and 8691 sold, in contrast last year (2017) saw an extra 529 rams sold and 336 offered.

The clearance rate was 94pc, which was up two percentage points on the rate of 92pc, and overall the sales grossed a total of $14,268,740, which was up $2,210,790 (18pc) on 2016.

Due to demand for sheep meat and also because of seasonal conditions across much of WA’s eastern marginal mixed farming areas, producers were destocking and preparing for next season – while hoping for better conditions.

One of the side effects was the total number of sheep and lambs transferred to the Eastern States in 2017, to the end of November, was 313,900 head.

This was an increase of 54pc when compared to the same time in 2016.

There has been an increase of 109pc year-on-year in the number of lambs transferred from 74,500 in 2016 to 155,400 in 2017.

There has been an increase of 22pc year-on-year in the number of adult sheep from 149,900 to 158,500.

Despite the large increase, this remains well below the record years in 2010 and 211 when 1.02m and 417,200 went respectively (total sheep and lambs).

The sheep industry faces an interesting future around its leadership as the Sheep Alliance of WA and Sheep Industry Business Innovation project come to the end of their three-year funding in June, 2018.

It is unclear if the State government will continue to fund an industry body to achieve its previously stated vision to double the value of the industry by 2025.

With the Department of Primary Industries and Regional Development losing funding and staff it may be unlikely that these groups will continue and grower funded groups may need to take a more leading role.

The Sheepmeat Council of Australia also changed its name to Sheep Producers Australia and altered its governance to be run by a skills-based board.

The industry has discussed alternatives to mulesing, which so far remains unresolved.

There was also an opportunity for producers to consult on the definition of lamb – which if changed will line up with the New Zealand definition and “allow for the eruption of permanent incisors, but without either incisor being in wear”.

If changed the decision would give producers a window of opportunity of a few weeks in which to sell their lambs – which they don’t have.

The consultation period ended in November and the final report and policy decision will be released in March 2018.

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