It would be very easy to have become a little despondent over the last few months if you are in the sheep meat and wool game.
Flow-on effects from CV-19, labour shortages and international shipping issues have all combined to produce a backlog of both old season’s lambs, mutton and now even the new season’s drop of fine West Australian merino & meat lambs. Wool pricing has also taken a downward turn over the last few months, after a few years of recovery and solid ongoing confidence.
This backlog is coupled with what appears to be another excellent year for lambing percentages. Estimates for WA are in the vicinity of 8-10% higher than normal, potentially putting an additional 600 – 700,000 lambs on the ground this season. MLA predicts that the national flock is set to increase by some 7.2% year-on-year on the back of this nationally occurring trend.
Again, this has made it easy to become a little disheartened, but we would like to breathe some positivity into the atmosphere and ask you, as sheep producers, to “Hold your line”.
In general, the last couple of months have seen very positive, and increased, ram sale results across the board for both merino and meat breeds. This shows that the underlying confidence is still with us, despite current market trends. The genetic pool is thriving, and quality is certainly evident as we travel the state, at sales, feedlots and abattoirs. We have an excellent product.
In regard to positivity for the wool market, as this article is written, it seems we are just starting to see a correction in prices. Greater demand amongst existing buyers is pushing things in a positive direction. The latest wool sale in Fremantle F16 (18th Oct) saw values rise 40-70c/kg clean over most fleece types on the back of Sale F15. The Western Market Indicator (WMI) also rose 44c clean. With movement in the Australian dollar, lighter trade supply, and now Eastern States floods, this upturn looks set to continue.
As with any industry, it is always wise to look forward and see what the projections look like: if the market appetite is increasing, holding, or heading south. In the case of Australian sheep meat, the outlook at this point appears extremely encouraging.
Sheep meat exports continue to be strong despite the abovementioned challenges. The first 6 months in 2022 saw solid increases, with a 5% rise in lamb exports and a 7% rise in mutton, against the same period last year. China, US and Malaysia continue to be our biggest markets. However, increasing volumes so far this year into Southeast Asia have seen a 38% increase year-on-year, with countries like Papua New Guinea & Singapore increasing volumes exponentially. Established markets in Malaysia also experienced an increase of approximately 34% for the same period. Further increased trends in Malaysia, Korea and Japan are encouraging, and give great confidence in the longevity of the Australian sheep meat sector. An 11% increase in supply to MENA (Middle East, North Africa) is another promising sign. With live shipping issues, which may or may not ease, these regions continue to build and upgrade processing and storage infrastructure for the future.
With all that has been said, one might put a case forward to actually increase sheep numbers and take advantage of what’s to come - a very bright outlook on the sheep meat front, and also emerging signs of some recovery for merino wool. This could be a good time, ladies and gentlemen, to “Hold the Line”.
