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Lamb prices reach new territories

• GOOD CUT: Minyip Meats owner Gary Cameron prepares his cuts for sale. Cameron can see the effects that high lamb prices are having on both sides of the livestock industry.

AS supply of lambs nationally continues to decline, prices of lambs are now entering uncharted territory.
Meat and Livestock of Australia are reporting a number of saleyard records being set over the past months in every state, with the latest in Victoria at Swan Hill, selling at $326 a head.
Lastest reports from the MLA show a spike in prices, with the Eastern States Trade Lamb Indicator reporting a 974c/kg carcase weight on July 12.
While in June the prices slowed, the prices have risen again at the beginning of July, which is reflecting the challenging year for sheep producers according to the lastest MLA sheep projections.
“A reduced breeding flock and generally poor lambing rates, combined with a poor weather outlook for winter, is expected to disrupt lamb supply in the coming months,” reads the MLA report.
Jamie Morgan, butcher at Your Regional Butcher in Warracknabeal said many butchers at the current time are struggling.
“With the rise in prices, our meat sales have nearly halved,” he said.
“We can’t afford to raise our prices, otherwise it would be an uphill struggle to sell our product,” Mr Morgan said.
“With the lack of supply, we’re seeing slaughtering rates higher than the lambing rates,” he said.
Alongside Mr Morgan, owner of Minyip Meats in Minyip Gary Cameron, who is also a farmer himself, commented on the state of the market.
“It’s all a balancing act,” he said.
“These elevated prices are rewarding for the farmers, but for local sellers, it’s a bit of a struggle,” Mr Cameron said.
“For regular consumers, I think we’ve reached the limit, and the premium point, anything higher than the current rates might hurt butchers more,” he said.
MLA saleyard indicators show that from July last year, the price of trade lambs have increased by a factor of 224c/kg carcase weight, from 757 c/kg carcase weight in July 2018 to the current 981 c/kg caracase weight.
However, on the flip side, demand of Australian stock is positive.
The current MLA sheep projections attributes this to international demand for Australia’s sheepmeat exports.
“Both lamb and mutton prices have reached record highs in the last 12 months despite the drought that has gripped the nation,” the MLA report reads.
“This has been underpinned by strong demand for Australia’s sheepmeat exports, which continue to push new highs, bolstered by a declining Australian dollar and limited competition,” the report said.
Sheep Hills farmer Mick Morcom, who primarily works with fat lambs, said farmers recognise the effect the market is having on both sides of the industry.
“It really depends on what side of the fence your on,” Mr Morcom said.
“Farmers are seeing good prices and reasonable equities on their stock, but we as farmers recognise it might not be sustainable in the long run,” he said.
“For farmers in and around the Wimmera and Mallee districts, lambing rates are reasonable, but for sheep producers up north, it’s not going well,” Mr Morcom said.
The drought unfortunately is affecting the lamb market supply, and the trend is set to continue as per the current outlook provided by the MLA.
“Unfortunately someone has to feel the pinch of an unbalanced supply and demand, and at the moment retailers might be feeling it,” Mr Morcom concluded.
MLA’s Market Intelligence 2019 key points and numbers forecast show a fall in lamb slaughter to 21.2 million head due to reduced flock and poor national lambing rates, mutton production to drop from recent highs, down 475,000 tonne lamb production from 2018, down 247,000 tonne lamb export from 2018 and down 8 million head sheep slaughter from 2018.