Prime Talk

The Bureau of Meteorology’s October to December forecast shows it is highly likely that the eastern two-thirds of Australia will experience drier conditions, with the exception of coastal areas east of the Great Dividing Range.

BoM predicted both the days and nights will be warmer than average for the rest of the year, with both factors meaning “a low chance of recovery for drought-affected areas of eastern Australia”.

Producers in many areas, even those who have received recent rain, will continue to bear the brunt of the ongoing drought, but it is also having an impact further down the supply chain.

Abattoir owner Robert Radford, Warragul, Victoria, said he was “really worried about the effect of drought”.

“While we have this drought happening in northern Victoria and NSW and even up in east Gippsland that is going to come back to bite us – it is not good for anyone, it is not good for producers, it’s not good for processors,” he said.

“We want consistent cattle coming through 12 months of the year and drought-affected areas put a dampener on that…the drought will have an effect on our cattle prices come November going forward.”

Mr Radford said while Australia’s export markets remained strong, drought conditions impacting the supply of finished trade cattle and lamb, and the subsequent price hike, was likely to take its toll on the domestic market.

“This year has been record levels we have ever seen in this country (for lamb). Two or three years ago we saw that with cattle – a lot of the domestic market has shrunk because of the high prices,” he said. 

“Consumers tend to stop eating lamb when it gets to the levels it is at now but hopefully with the flush of spring lambs, it will start to come off in price a bit.

“But there is a lot of lambs going overseas. We are exporting lambs ourselves so that market is growing which has put a lot of pressure on the price over the last month or six weeks.”

Another processor said they were going to incentivise producers to supplementary feed after the spring flush had come through, rather than process store animals as lightweight and diminish the future supply of finished stock.

And while the supply for the next four to six weeks was likely to be strong, with western Victoria and South East South Australia turn off in full swing, after that would be a real concern.

As both processors alluded to, the spring flush is in full swing following recent rain, with Victoria having its second highest weekly saleyard throughput last week since May.

Supply dived in NSW last week, likely because of the Monday public holiday and some predicted rain, and in general, yardings have been well below year-ago levels for NSW in September.