Market Morsel: Running out of options
Market Morsel
Live sheep export flows are yet to respond to the re-opening of the trade as the northern hemisphere summer moratorium comes to an end for 2022. Normally in September we would see a resurgence in sheep export volumes toward 50,000 head, but this year that has not been the case. Given 99% of sheep have been exported from Western Australia in 2022 there have been limited options for turnoff for the WA producer.
During 2020 and 2021 there was a solid trade from West to East with 1.9 million head of sheep and lamb making their way across the Nullarbor in 2020 and 0.67 million head in 2021. There has only been 91,000 head transported east (as at September 2022) so that hasn’t really been an option for turnoff either for the WA producer. Indeed, turnoff to the east represents just 2% of the total turnoff in WA, so far this year.
That leaves the domestic meat works in WA to pick up most of the turnoff, with slaughter volumes representing 84% of the sheep and lamb turnoff for WA so far in 2022. However, abattoirs across the country have been struggling under the lack of labour, capacity constraints, high operational overheads and very slim margins and the meat works in WA have been no exception.
If we are planning to exit the live sheep trade we need to ensure that processors, particularly in WA, are well supported to step into fill the gap that will be left, otherwise WA producers will bear the brunt if there is a backlog of sheep and lamb to process.
