Lamb prices puts spring in producers' step

IT HAS been a good year for lamb producers, but ``not so great'' for their bovine counterparts.

That's the annual report from stock analyst Richard Bailey, who said that Southern parts of the state were dry early, but the spring had been pretty good.

``It got a bit wet and cold, but, grass wise, it's been pretty good - if you drive down the Midland Highway, the view out the window is pretty special,'' Mr Bailey said.

``I was talking to a farmer near Bothwell the other day and he was saying this has been the best season they'd had in 10, maybe 15, years.

``That's grass of course - the cropping blokes will tell you a very different story, they're really struggling and a lot are saying the peas and potatoes are suffering and some of the poppies are only just OK.''

Mr Bailey said that the Australian dollar falling to somewhere approaching where it should be was a great help.

``We've been sitting above parity for a lot of the year and that's made it pretty hard,'' he said.

``A lot of beef producers would tell you that they can't sustain their businesses and the sort of prices they're getting at the moment [about $3.50 a kilo].

``The volumes to China are going up and if they keep going like that, there's got to be some pressure on something and, hopefully, it will be prices.

``The other thing is that China is starting to take better quality meat than it was even 12 months ago and when they start to learn how nice that is, it will hopefully be reflected in the market.''

Mr Bailey said that quite a few more cattle had been killed so far this financial year compared with the same time last financial year.

``We've killed 96,500 head to December 13 compared with just over 83,000 for the same time the previous financial year,'' he said.

``That's an extra 250 head a week and that's good for both abattoirs, and you have to keep them going or things get very average.

``Lamb-wise it's been a different story.

``We started the year at around 350  a kilogram, by the middle of the year we were up to 450-500 a kilogram and we basically haven't dropped below 420-440 a kilogram right through the spring, which is way better than Victoria.

``Their scale prices are still sitting around 400 a kilogram and that's had a huge impact on the number of lambs Swift and Tasmanian Quality Meats have brought in - our kill numbers on lambs are extraordinary, with 15,000-16,000 a week.

``I've never seen lambs being shipped into Tassie like they have been this spring, it's been extraordinary.

``From July 1 to December 13, we'd killed nearly 352,000 lambs, compared with 260,000 for the same time last financial year.

``There are three reasons for this, TQM's extra licences into the Middle East, the lower dollar and really good orders for Swift, from Melrose in Queensland.

``The people who have smiles on their faces this year are definitely lamb producers - there's some good optimism around the sheep industry.''

Mr Bailey said that it was ``really exciting'' to see processor TQM claim national exporter award.

``That's a real credit to them,'' he said.

Mr Bailey said that he believed the lamb and mutton markets would be good in 2014, but he couldn't pick what the beef market would do.

``If we get some good rains in Queensland and Northern New South Wales, I think beef will improve,'' he said.

``But it would want to improve - there are a lot of cattle in Victoria at the moment selling for 130 and 140 a kilogram - we were getting that 10-15 years ago and that can't be sustained.

``It's crucial the Australian dollar stays somewhere between 80 and 90.''

Stock analyst Richard Bailey

Stock analyst Richard Bailey


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