Highest national goat slaughter recorded in six years

About 600,000 more goats have entered the system since October last year and it has pushed returns south by 70pc.

An oversupply and challenging economical conditions in Australia's main export market, the US, was cited as the main driver for a fall in returns.

Meat and Livestock Australia's senior market information analyst Ripley Atkinson said an "intense" herd rebuild since 2020 had played a massive part in the price change.

"Obviously depots have increased throughput which has added to this significant rise. The ability for goats to reproduce numbers swiftly is also significant," he said.

In August this year, MLA data recorded the highest goat slaughter in six years

Mr Atkinson believed an 82pc rise in managed goat enterprises between 2016-2021, was a driver.

"There are a lot more goats behind wire as managed production enterprises, rather than goats being harvested ad-hoc and turned off," he said.

Australia exports between 50-60pc of its total goatmeat to the US and Mr Atkinson believed as the international demand for goatmeat softened quickly, this market was impacted severely.

"Export goatmeat prices were very high and at the same time, lot of US beef was available to the domestic consumer," he said.

"Basically, US consumers changed their preference back to US beef and away from Australian goatmeat because it was a cheaper alternative. This started to influence the Australian market greatly."

But, Australia had diversified into new markets this year, according to Mr Atkinson, with China, South Korea and Taiwan importing a solid amount of Australian goatmeat.

"The US market is very important for goatmeat and even though demand has fallen, when US beef production tightens there could be a potential for goatmeat demand to turnaround," he said.

Mr Atkinson believed since Australia was a major contributor to US imports, if a protein deficit was to hit, goatmeat could provide some of the shortfall.

But despite a drop in returns, River Light goat depot's Paul Blacket, Mallala, was more optimistic about the sector's future.

"It has been a turbulent year for the goat market. I thought we found a floor in the market when it fell to $3 a kilogram but it fell even further," he said.

Mr Blacket's throughput has doubled to reach the highest numbers in five years, with numbers coming in faster than what can be sold.

"It has been a good couple of breeding seasons, with good rain around the country, so numbers have really increased," he said.

But, it has caused an oversupply, according to Mr Blacket.

"The shops, butchers and restaurants are loving the fact the returns have come down. More consumers are buying goatmeat because it more affordable," he said.

Mr Blacket believed despite the drawbacks from downward pressure on returns, in the long run, it was beneficial for the sector.

"It will increase our markets. When it was trading at $2/kg above lamb but we lost a fair few markets because it was too expensive," he said.

"The drop in price has certainly opened up markets. We are now freighting across the entire country."

In January last year, over the hooks returns reached $8.81/kg and then plummeted to $2.06/kg at the beginning of October.

The market then reached a peak of $9.20/kg in June 2022 but a few months later in August, it started slipping down to $8.05/kg and never recovered.

Episode 3 market analyst Matt Dalgleish said goat returns were the first of animal proteins to suffer a dramatic decline in returns.

"The goat market has been affected in the same way sheep and cattle markets were. The market is also seeing substitution effects," he said.

"If beef prices are coming off and product is becoming more affordable, the preference would be to choose beef or lamb over goat."

Mr Dalgleish said despite lamb and beef markets marginally bouncing back off the lows, goatmeat had continued to be pressured lower.

"Other proteins have seen a small green shoot of recovery here and there," he said.

"Even though the demand for goat is pretty robust, it is just not enough to match the high turn-off rates."

Mr Dalgleish believed goat prices would not fall further but as processor appetite continued to waver, making floor space a premium, it could prove to be a difficult time for the sector.

"The significant restocker activity for sheep and cattle has significantly dissipated. We are seeing a combination of reduced processor purchasing in the face of a big turn off and the driver for past record high prices, stop," he said.