Tight sheep supply pressures exports

Tight sheep supply pressures exports


Analysis
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Limited supplies of sheep to slaughter are holding back Australian exports, but also keeping prices solid in the saleyards.

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LIMITED supplies of sheep to slaughter are holding back Australian exports, but also keeping prices solid in the saleyards.

Since about April this year there has been an overall dearer trend for mutton in NSW saleyards and the trend looks set to stay high for the rest of winter.

Rates for sheep sold over-the-hooks were still up about the 400 cents a kilogram (carcase weight) mark for top end heavy mutton this week, while the lighter categories from 14kg to 18kg topped at about 340c/kg. 

And even though the NSW Mutton Indicator did soften in the past fortnight before recovering some of those loses this week, prices were still well above returns being made earlier in the year.

From an export perspective, mutton shipments were generally down for the June quarter according to Department of Agriculture and Water Resources.

Mecardo analyst Matt Dalgleish said sheep export volumes continue to broadly mirror the pattern set in 2015 as the trend heads toward the usual seasonal trough in volumes as tighter production limits the export flow.

About 7570 tonnes (shipped weight) was exported during June.

Mr Dalgleish said this sits about 11 per cent below the five-year average and was the lowest monthly figure recorded since August 2012.

Breaking down the figures, export volumes of mutton to Asia were at 3228t - 13.2pc below the five-year average and dragged lower by Taiwanese and Malaysian figures.

Going against the trend, exports to the Middle East  were up 8pc on the five-year average at 2991t. 

Mr Dalgleish said this was despite Saudi Arabia and the UAE posting volumes below its five-year averages by 21.5pc and 27.6pc, respectively. 

Taking a broader view, Meat and Livestock Australia said during the 2015-16 fiscal year, Australian mutton exports reached 147,889t –  a 13pc decline from the historically high volume in 2014-15.

MLA said largely underpinning the contraction in exports was the decline in Australian mutton production during the year, with the financial year-to-April total (latest data available) back 8pc from the corresponding period in 2014-15, at 175,736t.

Mutton production was anticipated to tighten further during winter, in line with the historical seasonal trend according to MLA.

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