Live sheep prices are on the way back up, by $5-$10 per head, after Rural Export and Trading of WA (RETWA) entered the market last week for shipping wethers to fill its orders for customers in Kuwait, Qatar and the United Arab Emirates.
Prices in the saleyards the past few weeks had dropped to their lowest since January 2017 where producers were paid as low as $75 a head at Katanning on October 10, depending on quality and weight, while wethers suitable for live export remained firm at $85-$95 at Muchea on October 16.
RETWA is seeking up to 130,000 head for two vessels that have been on standby for five months.
Elders Muchea report last week saw “wethers suitable for live export gained $5-$10 per head with renewed live export demand”, while “rams suitable for live export gained a further $5 per head” to $75-$90 per head for ram hoggets.
On October 24 at Katanning, Landmark reported that export wethers were in limited numbers with most sales from $85 - $95, although older heavy wethers sold up to $140 to the trade.
On the same day Elders reported wether lambs to live export sold from $75 to $118 per head and wethers suitable for live export returned $70 to $115 per head depending on weight.
York sheep producer Peter Boyle, who would normally supply 25,000 sheep to the live export industry each year, said he had sold “a few” sheep to RETWA as it sourced numbers.
“We are grateful for the licence being granted to RETWA,” Mr Boyle said.
“It’s a good news story.
“It will reduce pressure on the farm and provide some much-needed cash flow.
“But they are experienced exporters and should be able to export without the added regulations – especially at this time of year.”
Mr Boyle said RETWA was paying $95-$100 per head, which was $10 per head more than compared to what was offered by Livestock Shipping Services on its last voyage in late September – which although was not in line with previous rates of $120-$130 per head, was a better result.
“Thanks to the 17.5 per cent stocking reduction we have to cope with we are penalised another $10 per head,” Mr Boyle said.
The addition of the greater requirements in stocking density was over and above the initial McCarthy Review recommendations which was only focussed on the northern hemisphere summer – with a review to be done “by a suitably selected task force before the next northern hemisphere summer” .
However, Dr McCarthy did say that the “industry must retreat to a safe position, consolidate and then build a new way forward based on science, trust and performance”.
Mr Boyle said that there would be an animal welfare and environmental issue on the cards if there weren’t more live export vessels leaving in the next few months – particularly if there was a long dry summer ahead.
WAFamers Corrigin/Lake Grace Zone president Bob Iffla said it was a “really good thing” to see sheep being exported again in numbers because the halt in the trade was bad timing for the industry.
“It all happened at the worst possible time,” Mr Iffla said, specifically in regards to the season many producers have had.
“We hope there’s no knee-jerk reaction like this again.
“It is a shame it has taken so long (to get the trade up and running again).
“There’s quite a lot of sheep that haven’t gone – we’ve got about 1000 head but we’ll probably keep them and shear them in February and wait for export after that.”
Mr Iffla said he usually sold 1500 head to exporters but he decided to sell 500 of them to local processors to alleviate some of the pressure on the farm with the added livestock numbers around after lambing.
He said his lambing percentage was not as high as last year, although he managed 70pc, higher than what some other producers achieved this year.
“We had a 100pc lambing the year before,” Mr Iffla said.
“It was just the season we’ve had.”
Mr Iffla said with the added on-farm numbers and a tough season, he had not cropped as much land as in previous years.
He usually crops 12,500 hectares but this year cut it back to 10,300ha to allow for more feed for the sheep.
Mr Iffla said it was good to hear that producers were being paid slightly higher rates for their sheep but recognised that due to the added requirements for exporters the trade would be more expensive going forward.
World moving towards chilled meat
THE world is moving toward wanting more chilled meat, as opposed to frozen meat, which places Australia in “a really strong position with our proximity to Asia” according to Meat and Livestock Australia (MLA) managing director Richard Norton.
Mr Norton made the comment at the Senate Estimates hearing into Rural and Regional Affairs and Transport in Canberra last week.
He said the chilled meat export industry domestically was “worth about $13 billion and about another $11 million in exports” for sheep and lamb.
“I would suspect that, of that $11m to $12m, about 60 per cent is chilled, as most countries now want chilled product as opposed to frozen product,” Mr Norton said.
“As you can appreciate, we’re a long way away from some of the other large markets like North America and Europe, where it is frozen product.”
He said he knew of forward contract prices for lamb in the Eastern States that were “$8 delivery for 16 to 26 kilo lambs” and the “average price in cents per kilo for lamb on the eastern seaboard is around $7.30, carcase weight”.
“In Western Australia, with no live export industry at the moment, it’s $5.80,” Mr Norton said.
“If the live export industry starts progressing ahead and starts buying sheep, I think you’ll find that will increase.
“They’re the dynamics that we’re up to at this moment.
“There’s a significant price difference between the eastern seaboard, where there is significant processing capacity and Western Australia, which has been traditionally a live export market.”
When questioned about processing more meat in Australia and the impact on local jobs, Mr Norton was clear that “there’s not a lot of job creation from a processing facility moving from frozen product to chilled”.
“Would there be more jobs in Australia if the live export industry closed down and it all went to chilled products in the Middle East?
“Sitting here today, there would be fewer jobs in Australia, because a lot of farmers in WA wouldn’t breed sheep because the market over there would be controlled by very, very few processors because there is not the processing capacity in WA.”
Mr Norton said the Western Australian Meat Marketing Co-operative had declared WA doesn’t have the capacity to slaughter the requirement of sheep sold off-farm in WA.
“So the market will transition,” Mr Norton said.
“Market forces will dominate in the future – be it for an organisation like MLA to say how that transition will happen.
“But at this present day it would have a dramatic impact on the income of farmers in WA if the (live export) trade was closed.”
Mr Norton said with “limited competition” in the market prices would stay low, but as exporters returned “it will go from $5.80 to $6.50 to $7 as the live export industry ramps up again in WA”.