Flock formally in decline

Market Morsel

The release of Australian Bureau of Statistics meat production and processing data today allows us to have a peek at what the sheep turnoff ratio (STR) has been doing over the last quarter. At the mid year mark the flock was on the cusp of moving into liquidation territory and now as at the end of Q3, 2024 we have formally crossed the line with the STR moving to 14.4%.

Historically when the STR has been above 14% the flock has begun to liquidate. Currently we are only marginally over the line so there is much more water to pass under the bridge before we see a strong move towards liquidation. At current levels the MLA forecast for flock decline in 2024 and beyond still seems a bit high based on where the STR sits presently. That’s not to say we won’t continue to see the STR trend higher as the year progresses, and a much drier 2025 or 2026 could see some reasonable liquidation begin, but it is way too early to call this as a likely outcome just yet.