High lamb prices force Australian factories to close

Abattoirs in Australia are beginning to shut their doors on the back of higher lamb prices.

7 News Melborne reports that the Manildra Meat Company in Cootamundra, New South Wales was forced to close as it can longer afford to pay premium prices for lambs which are now in short supply.

Speaking on 7 News Melborne, Ben Thomas from Meat and Livestock Australia (MLA) said current prices are very close to record levels.

The last time we saw levels similar to this was back in 2011.

Last year, lambs in Australia cost $130/head (€94/head) but on the back of a shortage in supply prices have increased to as much as $200/head (€145/head).

This comes as Australian farmers take advantage of high wool prices and begin to build their flocks after drought and it is expected that one million fewer Australian lambs will be available for slaughter this year.

According to MLA, the Australian sheep and lamb markets are set to benefit from reduced supplies and the apparent resilience from the domestic consumer.

Similarly, while there are mixed signals from the major Australian export markets, there are still many willing to procure Australian product and New Zealand (NZ) lamb and mutton exports seem set to fall further.

The result, it says, may be a fifth consecutive year of higher year-on-year prices, or if not, at least levels similar to those of 2016.

The Australian lamb slaughter is forecast to decline in 2017 on the back of slightly poorer lamb markings and fewer ewes joined, and the result will cascade to lower production and exports.

As a result, Australian lamb production for 2017 is projected to ease 2% to 492,800t carcass weight (cwt), and like slaughter, while this is a year-on-year decline, the volume is in the realms of record territory, it says.

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