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http://web.archive.org/web/20231028133334/https://www.afr.com/companies/agricult...Sheep prices plunge to $1 a head as farmers flood market
Brad Thompson Reporter
Sep 25, 2023 – 7.43am
A projected 23 per cent increase in Australia’s sheep flock since the last drought in 2020 has created a glut that has sent prices into free fall, as farmers scramble to sell before hot weather hits this summer.
Australia’s total sheep flock and breeding ewe numbers are forecast to hit 78.8 million in 2023, the highest level since 2007, after three straight years of above-average rainfall, according to a July update from Meat & Livestock Australia.
Hit by weak export demand and the collapse of farmer-to-farmer trade – when farmers sell sheep to each other – producers who built up flocks during three rainy years are sending them to market in droves as they face the prospect of hotter and drier weather conditions. Meat & Livestock Australia data shows cattle prices broadly down almost 50 per cent on last year and sheep prices down 37 per cent.
Woodanilling sheep producer Bindi Murray fears for the future of the industry in WA. Trevor Collens
In Western Australia, the collapse in prices has been exacerbated by the Albanese government’s move to shut down sheep shipments to the Middle East – trade important to a state that doesn’t have a big domestic market for lamb compared with NSW or Victoria.
Prices for some WA producers have dropped to as little as $1 or $2 a head.
The situation for WA livestock producers is a far cry from 2020 when, at the end of the east coast drought, they cashed in on high prices being paid by farmers on the other side of the country looking to restock. Almost 2 million sheep were trucked out of WA in 2020, along with big numbers of cattle, as east coast producers bred up on the back of rain.
But with talk for months about an El Nino weather pattern bringing drier conditions, and scars from the last drought barely healed, many east coast farmers have been racing to get bulging stock numbers down in a weak market. Cattle prices have plunged for similar reasons, and key export markets with weakening economies have been slow to chew through a build up in meat inventories.
Bindi Murray, a farmer in Woodanilling, WA, isn’t at the point of destroying animals but is struggling with much lower livestock prices.
“I’ve got some sheep here that I could have sold as lambs and was offered $130 a head. I sold some of them a year ago for $75 and then got quoted $40 a head for them. They’re the same sheep, just a different time. It just shows the magnitude of the price collapse over the past 12-18 months,” she said.
Ms Murray is worried that farmers who missed out on rain this year will have to destroy sheep that don’t measure up to the specifications of local meat processors and are unwanted by other farmers. “People are now making those hard decisions on farms rather than pushing the problem down the supply chain,” she said.
She worries that the WA sheep industry is in danger of losing critical mass and that will have a knock-on effect on rural communities and jobs along the supply chain. She said it was heartbreaking and morale-sapping to see lamb prices collapse after a period of high prices and strong demand.
In normal circumstances there would be grazier-to-grazier trade in sheep unwanted by meatworks, but that had completely dried up.
“That trade is just not there because there’s not the confidence for people to take extra sheep on at the moment,” Ms Murray said. “The position in WA with our Mediterranean climate is when the season goes against you, you need to reduce your stock numbers to look after the paddocks and prevent any environmental issues or animal welfare issues.
“You’ve just got a de-stock and that’s the tricky bit for the guys who have got into that position.”
Ms Murray is a Sheep Producers Australia board member and took part in a WA delegation that visited Canberra this month to fight for the live trade with the Middle East.
She said the live trade, facing the axe after lobbying by animal welfare groups, was essential to robust pricing in WA and a phase-out could be “catastrophic” for some farming families and communities.
“We don’t have that big domestic demand base of the east coast and that’s part of why live export plays a really important role. It gives us diversity of demand and more robust pricing,” she said.
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