Dry drives sheep slaughter

Ongoing below-average rainfall across many key Australian sheep producing regions saw sheep and lamb slaughter increase in August 2017. This is compared to a low base as slaughter rates in August 2016 were hampered by limited supply following three consecutive dry years and above-average seasonal conditions in winter/spring.

In August, national lamb slaughter was 10% higher from 2016 levels, totalling 1.97 million head (ABS). Meanwhile, sheep slaughter lifted 17% year-on-year, to 668,207 head.

The rise in mutton slaughter was predominantly driven by increased processing in NSW, Victoria and WA – up 47%, 24% and 45%, respectively. For lambs, the lift in consignments was largely underpinned by Victoria.

The June MLA/AWI wool and sheepmeat survey captured a decrease in the proportion of producers intending to expand their flocks by retaining older ewes, instead opting to retain more replacement ewes. With unfavourable conditions in many areas, the increase in mutton turnoff indicates sheep that were retained are likely now coming through the system.

Production in August increased accordingly; lifting 15% year-on-year to 44,640 tonnes carcase weight (cwt) for lamb, and up 23% to 17,265 tonnes cwt for mutton. Volumes were bolstered by continued growth in carcase weights which, despite the dry conditions, were higher in August. This reflects an increase in supplementary feeding, improving genetics and better management. National lamb carcase weights in August averaged 22.6kg for lambs, up 5% from the same time last year, while the average sheep carcase weight lifted 6%, to 25.8kg.

Despite the challenging season, there remains a lot of support for the Australian sheepmeat market. The seasonal spring low in prices remains at historically high levels for this time of year. Additionally, wool prices remain strong, international demand continues to grow and land use changes in New Zealand have seen production ease from Australia’s largest sheepmeat export competitor.