Mecardo Analysis - An 8 year low for Ovine slaughter
- By: "Farm Tender" News
- Ag Tech News
- Aug 02, 2019
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By Angus Brown | Source: MLA
We have seen lower lamb slaughter in the last year, just, and we have seen lower sheep slaughter within the last three. We haven’t, however, seen combined sheep and lamb slaughter as low as it was a fortnight ago.
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With seasonal processor slowdowns, it’s not unusual to see low sheep and lamb slaughter at this time of year. Lamb slaughter has fallen heavily in the last month. Last week’s east coast lamb slaughter was 261,000 head, 13% lower than the last week in June. The fall from the April seasonal peak is 37%.
Figure 1 shows that we have recently seen lower lamb slaughter. In late August last year east coast lamb slaughter hit 248,136 head, 5% lower than current levels, but itself closed to a 10 year low for a full week.
Last year we saw sheep slaughter take up some of the kill space left empty by the low lamb supply. Figure 2 shows sheep slaughter ramping up sharply late in July. The 60,000 head lift in sheep slaughter meant that while lamb slaughter hit lows, there were still a total of around 450,000 head going through processors (Figure 3).
We haven’t seen sheep slaughter rise to fill the hole left by lamb this year. Figure 3 shows combined sheep and lamb slaughter below 350,000 head. This is down 26% on the same time last year, and we had to go back to 2010 and 2011 to find similar levels.
Early July 2010 combined sheep and lamb slaughter reached 312,072 head. This was the last time sheep and lamb slaughter was below the levels of a fortnight ago. There have only been a handful of other weeks when slaughter has been this low in the last 20 years, and almost all were at this time of year.
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On average, combined sheep and lamb slaughter starts to rise in August, largely due to rising sheep numbers. Last week we saw a lift in sheep slaughter, so we might be following a similar trend, despite record low flock numbers.
Key points
* Lamb slaughter has been lower in the last year, and sheep slaughter within three but when combined, slaughter hit an 8 year low.
* Sheep supplies haven’t increased to fill the hole left by lamb, as we saw last year.
* Ovine supplies usually start to increase in August, but this seems unlikely this year.
What does this mean?
The lack of rain in NSW this winter might delay the flock rebuild, and see sheep slaughter take up some space at processors. It would take 100,000 head per week to get combined slaughter back to the levels of last year, and this seems unlikely as the only sheep left are likely to be breeding stock.
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It’s hard to see sheep or lamb prices easing too far until kill chains are filling up again. This could be by the end of August, but tight supply could feasibly last well into September.
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