Store market defies global chaos

The perfect storm for store prices to soar

Beef
Scanned in Lamb (SIL) first cross ewes from Erinvale, Milbrulong topped the AuctionsPlus Sheep Sale this week, selling for $381/hd. SIL first cross ewe prices have risen by 161 per cent since 2015.

Scanned in Lamb (SIL) first cross ewes from Erinvale, Milbrulong topped the AuctionsPlus Sheep Sale this week, selling for $381/hd. SIL first cross ewe prices have risen by 161 per cent since 2015.

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Since 2015 the cattle and sheep markets have risen by more than 100 per cent

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To say that the store market is "in a good space" would be an understatement.

COVID-19 has wreaked havoc on almost every corner of the globe.

The way people conduct business has changed forever through social distancing; there has been billions of dollars have been wiped off the ASX and the US unemployment rate to reach its highest point since the Great Depression.

However, in contrast to this the domestic store sheep and cattle market has not flinched, as producers and growers have been flocking to online sales to fill their paddocks.

A combination of extreme drought, resulting in a depletion of stock numbers, followed by widespread rain, has created the perfect storm for store stock prices to soar.

Australian Sheep Flock vs Eastern States Trade Lamb Indicator (source MLA) vs Mean Rainfall (source BOM). Graph AuctionsPlus.

Australian Sheep Flock vs Eastern States Trade Lamb Indicator (source MLA) vs Mean Rainfall (source BOM). Graph AuctionsPlus.

The Australian sheep flock is almost at a 100 year low, and growers are scrambling to find mobs. The has seen prices rise sharply.

The average price for Merino ewe lambs and wether lambs since January 2015 to May 2020, has risen 101pc and 139pc respectively, from $105 to $211 for ewe lambs; and $66 to $157/head for wether lambs. While, Scanned in Lamb (SIL) Merino and First Cross ewes have risen 105pc and 161pc, to average $291 and $367.

On the cattle front, the 'beef boom' of the 2016/17 season saw cattle prices climb to these dizzying heights. However, 2020 has since surpassed those levels. In September 2016 weaner steers online on AuctionsPlus averaged 414c, while weaner heifers averaged 406c in May 2017. As of May 2020, weaner steers and heifers are averaging 461c and 428c, respectively. Breeding articles have experienced similar positive trends.

51 Angus weaner steers, weighing 216kg from D Parfett, Blayney sold for $1200/hd or 555c/kg on AuctionsPlus this week.

51 Angus weaner steers, weighing 216kg from D Parfett, Blayney sold for $1200/hd or 555c/kg on AuctionsPlus this week.

With the Australian cattle herd at a near 30 year low, the rush to fill paddocks full of feed is on.

The Central West and North West Slopes and Plains of NSW, and Southern Queensland have been the dominant buying regions for breeding stock.

Looking forward, the extreme low stock numbers signal a buoyant sheep and cattle market for the short to medium term as Australia breeds up its livestock herd after years of depletion.

However, growers' and producers' willingness to pay these current record prices for stock will only continue, as long as feed is in paddocks, and domestic and overseas markets continue to buy Australian beef and lamb.

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