ELDERS’ Swan Hill-based livestock expert Matt Rowlands says the next three to four months in the sheep market will be unlike anything we have seen in the past three to four years.
Mr Rowlands said the industry had changed incredibly quickly and was creating uncertainty towards spring.
He said a huge part of the shifting market was export driven as the two main importers of Australian lamb, the US and China, had taken considerably less product over the past three months.
This year, Australia’s sheep flock and its breeding ewe numbers reached their highest levels since 2007 at 78.75 million and 46.14 million head respectively, according to the latest Sheep Projections update from MLA.
“It’s really becoming a numbers game now,” Mr Rowlands said.
“We have a lot more sheep which will be coming into the market, with MLA suggesting lamb production is expected to reach 540,000 tonnes this year, still beating 2022’s record production of 534,500 tonnes.
“Markets moving forward will be mostly dictated on the condition and finish of stock in determining price outcomes, with sheep meat slaughter forecast to improve as higher supplies of culled ewes and new-season lambs enter the market.
“The other thing I cannot stress enough is for producers to be organised and have a structured plan in place, including the numbers and class of stock they plan to be selling anywhere from the next four to six weeks.
“If people hadn’t been offered options of forward pricing into August or been consulted to plan, they may have been left to sell stock into volatile markets.
“Discussing options and industry leads is a non-negotiable we pride ourselves on as we plan with our clients and work towards the marketing options available to maximise returns during this difficult times.
“Although last week a spike at most southern sales was seen, there was a reality check when 42,000 head hit the Wagga market last Thursday and prices dipped $10-$15, which is what has been happening for the past 12 weeks on a weekly basis.”
Mr Rowlands noted that also softened confidence among restockers had and was still having an effect across the east coast of Australia which was not keeping a floor in the market.
He said the overall “stability of the market is of some concern” and producers needed to have a “complete reset on pricing” as the market adapted to all these outside influences.
“Locally I expect some larger numbers to start hitting the market in the second and third week of August, and across the state numbers should be really ramping up by mid-September,” he forecast.
“It’s not all bad news: with more numbers to come into the spring and softer pricing I do also see a lot of opportunity for our local area,” he said.
“There are dry parts across some states.
“e are situated well at the moment and I think people have a huge potential to source some incredibly good genetics of sheep that will come forward for sale. if they invest now into those type of sheep future production of their livestock operations will become more profitable and earn positive gains into a rising market over the years to come.”
With the wool market on its annual three-week recess, Mr Rowlands said it finished its previous selling year on a small high, with prices “relatively okay without being outstanding”.
He said in the finer micron ranges, up to 21-micron wools were well sought after, but as they started to get broader the market was getting a lot pickier.
“I think one of the issues here moving into spring will be the skins market,” Mr Rowlands said.
“Processors are struggling to get a tender for most skins and if you can get a price for your skins of $0 -$0.50 you are doing pretty well.
“Crossbred skins have been hit hardest, and those producers may even face a $2-$3 disposal fee per animal.
“However, Merino lambskins may seem some small benefit – up to $4-$8 depending on length and type, which would help offset some costs.
“Merino lambs will provide great trade options for those looking for good returns.”
Mr Rowlands added the market presented itself in a position the sector had not encountered for some time.
He said the level of added value to a producer’s business was the number one thing people needed right now.
“If you’re not getting that added value as a producer you do have options, so let the team at Elders get an understanding of your business to provide options and opportunities before you lock anything in,” he said.
“Or even if you just want to be added to our weekly industry reports and/or updates of any contracts or offers we receive which could benefit you, we are excited to be able to provide for local producers.”
