Record sheep prices a feature of 2018, while cattle prices remained steady

The industry has seen record meat and wool prices causing a lot of producers to reinvest into shearing sheds and sheep yards, and some croppers to rethink their business strategies and diversify back into sheep.

Although, any growth to the State flock that currently sits at about 13 million (some say less) would have come mostly from existing sheep producers choosing to run more numbers.

For those associated businesses that offered manufactured yards, sheds and fences it has been a profitable time.

Everyone from shearers to stock agents and producers have been talking up the good times, with some elderly producers saying they had “never seen it so good”.

But there are two sides to the coin.

Despite some record prices being achieved for lambs, ewes and wool types causing sheep enterprises to be more profitable than they have ever been, flock numbers are at a record low and there are grave concerns that could continue if the live sheep trade is phased out.

Many sheep producers who have supplied the live sheep trade over the years have endured months of uncertainty and speculation, while others have decided to change their practices and supply to local processors directly.

If the trade were to be phased out the State flock has been tipped to reduce to as low as eight million head – according to WAFarmers – which could put some pressure onto processors to keep their doors open.

WA processors have already expressed the difficulties of operating due to the high sheep and cattle prices, operating costs, regulations and staffing shortages that have impacted them.

Goodchild Meats at Australind closed its doors in August as the business restructured for the future.

At one stage Elders Real Estate had three abattoirs listed for sale across the State, which have been picked up by the Iranian-owned company International Meats.

This company has also purchased Beaufort River Meats from live export shipping company Wellard for $8m.

It is expected that the company will export Halal-certified meats directly back through its supply chain to Iran to sure up its food security.

At the saleyards there have been some strong yardings, particularly in the earlier months of the year due to the seasonal conditions.

Lamb, mutton and wether prices have all tracked fairly well this year at the saleyards, depending on quality and demand.

Record lamb prices were seen at the Muchea Livestock Centre when on July 31, Topham Bros, Coomberdale, hit the record at $205 for a pen of 27 May shorn Prime SAMM lambs.

A week later on August 7, Quairading producers GW & E Anderson and Son saw eight crossbred lambs top at $217.

The heavy lambs were estimated to weigh about 35 kilograms dressed weight, returning approximately 650c/kg dressed weight.

That record was held until August 14, when it was topped again by Pam Hinkley and Sue Boucher, Pamellen Suffolk stud, Clackline, who sold a line of 17 heavy Suffolk lambs for $218 per head.

So far that record stands.

In October Farm Weekly reported record prices at the Corrigin-Wickepin Premier Ewe and Wether Lamb sale as setting the “benchmark for sheep prices going forward” under auction.

Combined, the Elders and Landmark commercial unmated ewe sales totalled $3.679m in returns.

The top price hit a high of $239 for March shorn, Glen-Byrne blood, 3.5-year-old Merino ewes.

The previous record for commercial ewes was $221 set in 2017.

The sale saw a total of 23,073 ewes, ewe lambs and wether lambs sell at an average of $159.45.

This year saw lamb prices push up to as high as 720c/kg in the saleyards due to processor demand.

Meat and Livestock Australia’s trade lamb indicator year to November put WA’s average lamb price at 602c/kg carcase weight – up 4pc or 23c/kg on 2017 figures.

MLA said mutton prices in WA averaged 410c/kg carcase weight – up 8pc or 29c/kg.

Mutton has also seen some outstanding prices, particularly on July 31, when it reached its peak at 500c/kg through the saleyards.

Taking more of a national view, with only one month of data for 2018 outstanding, Australian lamb exports for the January-November period reached 245,000 tonnes shipped weight (swt).

This was 7pc above 2017 levels and 14pc above the five-year average.

On the back of elevated slaughter, Australian mutton exports for the January-November period reached 162,000 tonnes swt.

This was 22pc higher than the same time last year, and 15pc above the five-year average.

WAMMCO was reported as paying $6 a kilogram for top heavy lambs early in the year, which was supported by forward contracts through to February.

In August, WAMMCO delivered a record profit of $20 million for 2018, before a record pool bonus of $4.3 million was paid out in rebates to producers.

The co-operative paid an average of $135 per head of lamb and $97 per head of mutton at the end of the financial year.

MLA said from July to October, chilled lamb and mutton carcase exports to the Middle East out of WA more than doubled on year-ago levels, to almost 5000 tonnes shipped weight (swt), or to an estimated 284,000 head on an assumed 17.5kg average carcase weight, while shipments out of the Eastern States increased 17pc, to 16,100 tonnes swt (or an estimated 918,000 head).

WA’s ram sales also set new benchmarks with the gross total reaching $23.7 million – the biggest selling season on record.

The State’s top price ram honours across all breeds by auction or private sale went to the Manunda stud, Tammin, when it sold a ram privately for $30,000 to Woolkabin stud, Woodanilling, at the Narrogin Long Wool Day held in August.

Total ram auctions grossed a record $23.8m and a record average of $1556 for 15,277 sold at auction.

Merino breeders averaged $1785 rising to a new height for the fourth consecutive year.

There has also been a lot of other happenings affecting the sheep industry.

The State Barrier Fence had been allocated funding late last year by the State Government and that showed in new fences being built and other areas repaired and maintained throughout the year.

The Esperance Extension finally got EPA approval and work on that is expected to start next year, if the Environment Minister Stephen Dawson gives it the tick of approval.

Recognised biosecurity groups also started to grow in number and strength as more producers decided to get involved and fight the scourge of wild dogs together by baiting and funding licensed pest management technicians (doggers) to fight the cause on their behalf.

The success has been noted in reduced numbers of foxes and dogs in some areas where efforts have been targeted and managed well.

Some producers have reported hundreds of sheep mauled or killed by dogs in the past 18 months costing thousands of dollars in losses.

Greater awareness of the issue has also caused more people to keep an eye out and report any noticeable activity in their areas.

Animal welfare and biosecurity continued to be themes of importance this year as the Livestock Production Assurance program began to be audited and the State Government tried to gain support for its amendments to the Animal Welfare Act 2002.

In the end the Agriculture and Food Minister Alannah MacTiernan had to accept that her advice had not been that great and she dropped the controversial Henry VIII clauses that would have seen inspectors with unfettered powers able to enforce compliance unlike anything that the State had seen before.

While she still believes that enforcement of the new National Standards and Guidelines on Animal Welfare, adopted by the State, need to be considered by the WA industry, the Minister was willing to put it aside for now to see progress on the issue.

The full review of the Animal Welfare Act 2002 is also anticipated to begin next year.

The industry also saw support for a change to the lamb definition, which will see Australia on par with New Zealand and offer producers a few more weeks to market their lambs before they become hoggets.

After receiving support from the industry, Federal Agriculture Minister David Littleproud agreed the change was “common sense” and would require an amendment to the Export Control (Meat and Meat Products) Orders 2005, which is expected next year.

There has also been further debate in the industry around the practice of mulesing.

This is expected to continue as efforts are made to reduce the need for the practice while maintaining the sheep’s health and resistance to fly strike.

It is hoped that with new technologies becoming available a solution can be found to the issue.

THE WA cattle industry has been ticking along during 2018 with “business as usual” according to livestock agents.

While some areas in the Eastern States were declared in drought, WA had a reasonable season, despite a late start, with enough feed on the ground in most places to assist cattle in reaching their target weights.

Prices at the saleyards have been fairly stable throughout the year and producers have just “gotten on with the job”.

Yearling steer prices picked up to almost 300c/kg liveweight in recent months after dropping for four months and bottoming out at about 260c/kg at the saleyards.

The price has been good since August and is set to finish the year around the same price as December last year.

Earlier in the year Farm Weekly reported that the stud bull selling season had seen 2361 sires across 25 breeds presented in WA.

There was a 77pc clearance (1810 head sold) with a $455/head drop on 2017 prices to average $6187.

The end tally came to $11.19m paid by beef producers for their sire selections.

The top-priced bull honours went to Lawson Momentous M518 when it sold for $31,500 at the Lawsons Angus Jerdacuttup sale in January.

There was some uncertainty and concern in the industry for much of the year regarding the Muchea Livestock Centre and the future of the Boyanup saleyards.

At Muchea the West Australian Meat Industry Authority (WAMIA) decided to change the sale date for cattle from a Monday to a Wednesday – but industry concerns and pressure from agents and small cattle producers nearer to the centre (mainly hobby farmers) caused WAMIA to backflip and leave the date unchanged after some negotiations with agents.

Some Gascoyne pastoralists were upset by this, citing reduced transport costs during the week which would have been better for them, as opposed to what they pay now for livestock to be sent on Sunday to reach the yards in time for the Monday sale.

With efforts to cut back on costs, WAMIA also pulled back from offering services on the Sunday, as agents arranged a contractor to receive and draft cattle for the weekly sale.

WAMIA said it was trying to save $500,000 a year by making the changes at the centre.

WAMIA also gained a new chief executive in Greg Lott, who replaced Andrew Williams, after a brief stint in a caretaker role this year.

The State Government advanced the expressions of interest into the future South West saleyards – to replace the ageing Boyanup facility which the Shire of Capel would like to see removed from the current location when the lease expires in 2022.

Two applications have progressed to the next stage and a decision is likely in late 2019.

Cattle producers across WA have also expressed concerns about the ramifications to a phase out of the live sheep trade.

Having experienced the 2011 shutdown of live cattle exports they fear a similar result may play out in the coming months.

The industry may be impacted drastically by any major changes to the live export regulations – on top of what has already started to hit home with additional costs for observers and reduced stocking requirements.

The northern cattle trade is likely to feel the brunt of it, with few processors to supply locally and not enough backgrounding properties closer to the markets to utilise for preparing cattle for sale.

South West producers may also be impacted by any future changes to the live export requirements as possible retaliation by Australia’s trading partners may drop any interest in a range of agricultural produce including Bos Taurus (British breed cattle) meat as well as grain and hay products.

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But that remains to be seen as beef exports continue to increase – mainly from the Eastern States destock.

The live export company International Livestock Exports also had a show cause notice issued against it in October which was concerning for producers.

The company has links to Emanuel Exports and because of this had to prove that it wouldn’t take sheep to the Middle East after the company (Emanuel Exports) lost its export licence in June.

International Livestock Exports is a major player in the cattle trade, exporting or arranging processing for 130,000 head mainly from the Kimberley and Pilbara, and concern about its possible licence cancellation sent stress waves through the industry.

Red meat is also coming under attack from the “fake meat” campaign and Meat and Livestock Australia has used industry levies to promote the paddock to plate overview in educational ways to inform consumers of where their meat comes from and the benefits of locally produced products.

There have also been a number of supply chain related events throughout the year for producers to get a better grasp of the whole process from farm to consumer and also realise some of the marketing potential available for grassfed and organic and free range produce.

Cattle hide prices in Australia and around the world took a massive hit in 2018, with prices bottoming out at less than US$40, somewhat lower than when the Global Financial Crisis hit around 2009.

Prices are the lowest in 30 years, according to hides trader and industry consultant Ross Barker.

With the move to more synthetic products in sports shoes and clothing, leather demand has decreased.

Processing costs and environmental impacts of salting were also impacting on the industry.