Rain lessens panic for producers

Mixed bag of good and bad news for Australian meat producers

Sheep
Jock Duncombe of Duncombe and Co. Livestock, Crookwell, selling at SELX Yass. He believes the recent rainfalls along the eastern states has eased sellers panic caused by the Covid-19 pandemic.

Jock Duncombe of Duncombe and Co. Livestock, Crookwell, selling at SELX Yass. He believes the recent rainfalls along the eastern states has eased sellers panic caused by the Covid-19 pandemic.

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Rain lessens panic, but still a mixed bag of good and bad news for meat producers.

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For meat producers wondering what the short-term future holds amidst the current Covid-19 panic, current market trends are angling for both good and bad news to be on the cards.

In the saleyards, lamb yarding numbers have dropped nearly 30 per cent, while mutton yardings have dropped by 15pc.

According to industry experts, these reduced offerings may be an indication that producers are responding to the lower prices. But it may also be a result of saleyards around the country imposing restrictions to minimise workforce numbers.

Many selling centres are capping the number of stock coming through to be sold, such as Bendigo, Victoria, where a cap of 20,000 lambs has been introduced.

With these more measured numbers compared to previous weeks, prices for lambs in the saleyards may indicate the start of a steadier market.

But according to livestock agent Jock Duncombe of Duncombe and Co., Crookwell, in southern NSW, lessening throughput of sheep numbers is due to a combination of factors, and is more seasonal than anything.

His main selling centre is the South Eastern Livestock Exchange (SELX), situated at Yass, where there is no capping of stock numbers, just restricted entry to agents, buyers, drovers and SELX staff.

"I think there is a number of factors impacting the markets at the moment, but a lot of it is seasonal and a lot of it is off the back of the recent rainfalls around the eastern states," Mr Duncombe said.

"Producers feel they are no longer forced to sell under the current global conditions. They are buying themselves a bit of time while this Coronavirus pandemic continues.

"They can let their crops grow, they can hang on to their lambs, and wait until this pandemic settles down and then they can make a more conscious decision without any panic involved."

He said producers were now able to finish off stock to a better grade, where originally they felt they may have had to offload.

People are buying themselves a bit of time while this Coronavirus pandemic continues. Now they have received the rain, they don't feel forced to sell under the current global conditions. - Jock Duncombe, Duncombe and Co.

But the market still has a list of challenges to face.

Heading that list is Australia's export trade lamb market which seems to have hit the pause button in the brunt of the global pandemic, and according to Mr Duncombe, it could spill into our domestic market.

"Dwindling numbers on the export market at the moment is due to the US and Canada not purchasing or limiting the amount of lamb they are buying off us," he said.

"Since their restaurant and food chains have all closed up, they are just not purchasing export lambs like they usually do on a regular basis."

Trade lambs sold direct to processors slumped to an average of 743 cents a kilogram carcase weight in the past week. The falls for heavier lambs were not as sensational, but did slip about 40c/kg to average 780c/kg.

In Mr Duncombe's view, the domestic markets are rocking along well, even though they have taken a slight backward step of late.

"It's had a knee-jerk reaction, the meat is flying off the shop shelves - it's actually fired up the domestic meat industry," he said.

"Now we just need things to calm down in the US.

"Looking forward, what will happen if they don't get on top of Covid-19 over there, you will see a lot of export lambs filter onto the domestic market and that is what we don't want.

"That is the wrong article for the wrong market."

According to Mecardo analyst Matt Dalgleish, it will be hard to see lamb and sheep prices bucking the trend for a downward inclination this week, particularly while the spectre of Covid-19 looms over offshore sheepmeat demand.

But on a positive note, the release of the March Department of Agriculture Water and Environment red meat trade figures show that total Australian lamb export volumes remain on a healthy trajectory with export flows to the US, Asia and Europe all above the five-year seasonal pattern.

The story Rain lessens panic for producers first appeared on Farm Online.

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