The cheap sheeps
- Since 2012 the long term discount for WA Trade Lamb & Heavy Lamb compared to their east coast counterparts has been 9%.
- WA Light Lamb has fared marginally better with an average discount of 8%.
- WA Merino Lamb holds the lowest average discount since 2012 at just 4%.
- Meanwhile, WA Restocker Lambs are the class dunce with an average spread discount of 19% achieved over the last decade.
- WA Mutton has achieved an average of 13% discount since 2012.
A chat with ABC WA reporter Eliza Borrello this week, about the live sheep trade, got me thinking about West Australian lamb and sheep discounts to the eastern states. Then, when the title pun came into me head I knew it was the article for me.
If you’re not already familiar with “The Cheap Seats” on Channel 10 have a look at it as it’s one of the funniest shows on TV at the moment. It’s got nothing to do with sheep and lamb, although it does have a hilarious Kiwi host, Melanie Bracewell, and they all like sheep don’t they?
There’s also some other fella called Tim. I think he is the less hirsute, younger brother of Hamish (from Hamish and Andy fame). Anyway, I’m going off on what the Agwatchers call a Hoiberg tangent so I better get back to the ovine discounts in WA.
A look at average monthly trade lamb price spreads between WA and the East coast shows that it is a pretty rare occurrence to see WA trade lambs have the upper hand. Over the last decade the percentage spread has fluctuated between a 10% premium to a 30% discount, with most of the time spent in discount territory. The rolling annual average (black line) highlights that the trade lamb spread is firmly entrenched in discount territory. Indeed since 2012 the long term average discount has been 9% for WA Trade Lamb compared to their east coast counterparts.
Currently the monthly WA Trade Lamb discount to the east sits at 24%, as the WATLI is still recovering from an Easter price slump.
It is a similar picture of discount across all MLA reported lamb categories for WA producers.
WA Heavy Lamb discounts have mirrored the Trade lamb trend with the long term average, since 2012, siting at 9% discount too. WA Light Lamb has fared marginally better with an average discount of 8%.
Currently, the monthly WA Heavy Lamb discount is at 11%, meanwhile the Light Lamb discount is trading at 19%.
Of all the lamb categories the WA Merino Lamb holds the lowest average discount since 2012 at just 4%, spending much more time over the last decade in premium spread territory. At current prices the WA Merino Lamb is also in the best shape with a discount of just 7% to East coast Merino Lamb.
If WA Merino Lamb are the discount spread stars, WA Restocker Lambs are the class dunce with an average spread discount of 19% achieved over the last decade. WA Restocker Lambs are also the worst performers presently, with the monthly spread discount sitting at 35%.
The discount for WA Mutton currently sits at 15%, not far away from the decade average of 13% discount achieved since 2012.
This week rumours abounded of the Australian Labour Party’s re-commitment to phase out the live sheep export trade if elected. Yesterday a labour party spokesperson confirmed the rumours to journalists. In WA the live export trade has helped underpin sheep prices and prior to the northern hemisphere summer moratorium the live export trade accounted for 30% of WA’s annual sheep turnoff.
Should the ALP get elected and proceed with a phase out of the live sheep trade it will be interesting to see if the WA sheep sector can pivot successfully towards chilled and frozen exports and maintain, or even improve their price discount woes. Or, will the demise of the live sheep export sector also coincide with WA’s sheep and lamb discounts pushing further into negative territory.
Unfortunately, there isn’t much joy for the WA sheep producer in this analysis piece. If you need some cheering up and a bit of a laugh, why not try “The Cheap Seats” instead.