Sheep prices slump

AFTER soaring to record highs sheep prices have fallen significantly in recent weeks due to a combination of market and seasonal constraints.

A backlog of mutton on the global market has put downward pressure on sheep prices across the country, including Tasmania.

Mutton prices in sale yards and on online selling platforms have fallen by more than 50 per cent in recent weeks while prices for store lambs have also dropped by about 20 to 30 per cent compared to the same time last year.

Nutrien southern Tasmanian livestock manager George Nichols said constraints in export markets, particularly China, were a major factor in the current price dip.

“Ultimately meat is a relatively perishable product. The processors have export markets to sell into and when they’ve got products that are slow to move and sitting on ships they don’t have the ability to keep processing,” he said.

“As much as everyone is sick of the story of China, China, China, they are just not consuming the level of product and not buying the same amount of product and the processors can’t shift it at that end.

“Processors will be losing money on the product they’ve got on hand now, so they can’t afford to step into the market and buy more sheep when they’re already losing money.”

While lamb prices have not been impacted as much, Mr Nichols said the extremely wet spring in Tasmania had seen few top-quality finished lambs entering the market in recent weeks.

“That export and trade lamb job in the sort of killable 20kg-plus carcass lambs, they’re still paying for quality because it’s a premium product that’s able to be sold,” he said.

“The lamb job isn’t where it could be, but it’s not in the same situation the mutton job is. It’s more reflective of seasonal and quality variations.”

Mr Nichols said with a lack of sunshine and wet areas many lambs were not ready for processing.

The big wet in mainland grain-growing regions has pushed back the cereal harvest so many traditional buyers of Tasmanian store lambs are yet to enter the market.

Mr Nichols said many of the mainland producers who would normally be buying in Tasmanian lambs before Christmas to put onto cereals stubbles were running about a month behind with harvest this year.

He said once the grain harvest is over there could be more demand for shorn lambs from mainland farmers.

“That store job, we’re three to four weeks behind and everyone is,” he said.

With record spring rain in many areas, including some of Tasmania’s driest parts, pasture production is now taking off.

Mr Nichols said this could provide opportunities for producers.

He said some store producers may be able to hold onto stock longer and put more weight on them or finish stock.

At the same time store buyers may be able buy in more sheep.

“The flip side of that though is it will probably lead to an influx of more product after Christmas so there’s two sides to that coin,” he said.

Mr Nichols said there are opportunities for producers who can buy in mutton at the moment and hold onto sheep until later on.

He said the Tasmanian store cattle market had strengthened on the back of demand from NorthWest fatteners.

With the major Tasmanian sheep selling season kicking off next week at Oatlands, Mr Nichols said there could also be increased demand from Tasmanian farmers in areas such as the East Coast, which are having an exceptional season.

“I think the level has been found and there’s an opportunity there for the market to get better,” he said.

“We’re certainly not expecting any drops, I think the market should be fairly stable and there should be a rise into the new year.”