Producers continue to ride sheep wave
WA sheep prices have surged in recent months on strong demand and low supply.
The WA sheep industry has had a blistering start to 2017 with the WA heavy lamb indicator price up by 32 per cent compared with the same time last year.
WA indicators had shown local prices had tended to be lagging behind Victoria and the national average during most of last year, but in recent months the gap has narrowed and even surpassed the average in March.
The price for lamb nationally has now more than doubled the five-year average increase of 6.5 per cent in the space of just three months, despite a 6¢ to 12¢/kg softening as a result of the continued dry start to the season.
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Meat and Livestock Australian analyst Ben Thomas said it was a great time if you were a seller, but not so great if you were a restocker, feeder or processor.
“High lamb and wool prices are having a compounding affect on prices, which we expect will remain strong and average above where they were last year throughout the winter,” he said.
Jingalup sheep farmer Steve McGuire said it was positive times for sheepmeat and wool producers, but he warned against producers becoming overly confident.
Mr McGuire, who earlier in the year was named the WAFarmers delegate to Wool Producers Australia, said he had seen the highs and lows of the sheep industry and was cautiously optimistic for the future.
This year Mr McGuire said he has been averaging $110 for his lambs, which is about a 20 per cent increase on last year.
“All the stars are aligned for producers at the moment with low feed prices, decent seasonal conditions and strong worldwide demand for protein and wool,” he said.
“But, having said that, the industry needs to not get too greedy because if the price goes much higher than what it currently is we will be at risk of pricing ourselves out of the market.
“Already the local processors are finding lamb too expensive to make a profit with prices at the level they are currently.”
Mr McGuire plans to produce about 6000 lambs for the year.
“At this stage I am pretty confident the prices will remain firm until that time, but it would be handy to have a more attractive system for future contracts, as they do with grains,” he said.
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