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Up and down year for Australian sheep

10 January 2021
Meat & Livestock Australia

This year has been a year like no other. A global pandemic, a worldwide recession, drought-breaking rain, a tumbling wool market and a difficult trade environment are just some of the factors contributing to the sheep market’s movements throughout the year.

  • The restocker lamb indicator hit a record on 10 March 2020 at 1025¢/kg cwt, with the National Mutton Indicator also hitting a record in March at 729¢/kg cwt.
  • Carcase weights for both lamb and sheep meats both continued to climb
  • The Eastern Market Indicator (EMI) for wool fell to 858¢/kg in September, a 47% reduction on January’s price of 1609¢/kg.

Drought-breaking rain occurred across most of eastern Australia’s sheep producing regions, while Queensland and WA largely missed out. The improved season, off the back of the worst drought on record, triggered a rebuild in Australia’s sheep herd, contributed to more weight on animals which in turn saw carcase weights jump. Year-to-date carcase weights for mutton and lamb are 25.07kg/head and 24.85kg/head, respectively – both increasing 6% year-on-year.

The rebuild saw producers retain more lambs than usual, restricting supply and pushing up prices for mutton and restocker lambs which reached highs of 729¢/kg cwt and 1025¢/kg cwt, respectively. However, prices for some other categories of sheep, such as heavy lamb, didn’t climb as much. The national restocker sentiment was most evident in the saleyard survey, released last week, which showed sheep saleyard throughput was down 14% on 2018–19 levels to 14.3 million head.

Exports were impacted by COVID-19 as key trading partners experienced economic pain associated with the virus – lamb exports are back 7% compared to the same time last year, with mutton export volumes down 23%, placing the export volumes of both around 2017 levels. Despite generally lower export volumes, mutton exports into the USA have climbed higher, up 2.6% year-on-year to 18,024 tonnes swt.

COVID-19 also impacted the domestic Australian sheep industry during 2020. In the middle of the year, Victorian processors had their capacity cut to 33% to meet regulations as the state entered its second lockdown. The imposed restrictions resulted in an excess of sheep going into NSW saleyards and abattoirs, and a drop in prices for the state.

The year also saw the wool market tumble by nearly half, falling from 1609¢/kg to 858¢/kg before recovering in the last quarter of the year – putting pressure on wool producers.

The unconventional year has forced the sheep industry to adapt and innovate, with one key change being a sharp uptick in online sales activity. AuctionsPlus reported a record number of sheep being transacted through their platform this year, as an inability for buyers to attend saleyards in-person and an increased desire for interstate stock pushed online sales up.

Despite the challenges of 2020, the sheep industry has adapted and fared well, and is well placed to enter 2021. Some key statistics from the year include:

  • More than 691,000 live exports to December
  • the heavy lamb high for 2020 was 987c/kg cwt recorded in March
  • the light lamb high for 2020 was 932c/kg cwt recorded in March – also a historic high
  • the trade lamb high for 2020 was 949c/kg cwt recorded in March, matching 2019’s high.

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