Record sheepmeat exports to drive winter price rise

A total of 145,406 tonnes swt were exported this quarter, beating the 2019 volume of 121,590t swt, in the same period.

This rise in exports also pushed flows to 25pc higher than this time last year, providing a 33pc increase in the five-year-average for the first quarter of the year.

China and the US dominated trade flows and Episode 3 market analyst Matt Dalgleish believed the new record was pretty significant.

Looking back at seasonal and global trade conditions, Mr Dalgleish said in 2019, the sector was faced with African Swine Fever and drought, causing elevated exports.

But, the 2024 record, is off the back of increased global demand and competitive pricing.

"China had a significant reduction in pork production, so the demand from China in 2019 and 2020 was voracious," Mr Dalgleish said.

"It is important to understand the growth in demand this year is not because of a black swan event such as ASF, it is growth and demand in its own right."

In 2019, the impact from drought was also significant, causing downward price pressure and according to Mr Dalgleish, concerns about a dry conditions in 2024, caused similar pricing challenges.

"This made Australian sheepmeat more competitive globally and this year, NZ pricing is above ours and Australia has the cheapest sheepmeat on the market almost," he said.

Increased exports is without a doubt a flow-on effect from cheaper pricing but Mr Dalgleish believed increased supply had added another layer to the market.

"Demand is higher because we are cheap but there's also been an increase in lamb and mutton slaughter rates this year," he said.

On average, rates are 100,000 head higher each week compared to last year but this increase in supply has been matched with demand, causing prices to remain stable - for now.

"From an economic perspective, the increases of both factors means it has not provided too much of an uplift in pricing," Mr Dalgleish said.

"As we move into reduced supply in winter, if demand remains the same, we will start to see prices pickup."

Tarcowie sheep producer Henry Bennett hoped to see a price rise in the coming months, as he planned to put the remainder of his lambs through the system.

"We would like to see this high export demand push prices up. We will take any price rise we can get," he said.

Mr Bennett began selling through SA Livestock Exchange at Dublin in January and this week, made $140 for 250 Merino lambs and three weeks ago, made $130.

"We were really happy with those returns. They always say, to get rid of high prices, have high prices. So, eventually it brings the market down," he said.

"I would love to see $7 a kilogram in the months ahead but anything higher is not sustainable."

Throughout the next three months, Mr Bennett will continue selling lambs through the saleyard.

"Generally, later lambs get better returns or the same as the tops which were sold earlier because of supply," Mr Bennett said.

Elders Eudunda Conor Lamond had noticed a rise in producer confidence since exports began to boom and hoped it would continue.

"This year, a lot of lighter lambs, about 16 to 20 kilograms carcase-weight, went to export. They were sent in spring and more went at the start of this year," he said.

"This has actually taken a lot of store lambs out of the system which are generally finished in the winter, so with even less lambs coming through, prices should rise."

Processor presence at recent sheep markets has been noticeable, according to Mr Lamond, and they were competing "hard".

"Prices will be dear but how dear, I am not sure. Processors are telling us one thing but supply and demand says another," he said.