Rains ease pressure over sheep stock

The mass exodus of sheep from WA to the Eastern States has all but ended as heavy winter rains ease pressure on WA farmers to reduce stocking rates. Nearly 2 million head were sent from WA to the Eastern States in 2020 — the highest number on record — of which 1,006,728 were transported in the first half of the year. From January 1-June 31, just 460,864 sheep and lambs crossed the Ceduna checkpoint from WA, according to the Department of Primary Industries and Regional Development. While the number was down 54 per cent on the record high of the same time last year, it still smashed the previous record of 370,288 in the first half of 2011. According to Thomas Elder Markets analyst Matt Dalgleish, seasonal patterns showed the trend had moved back to the “normal range” and slightly below the 10-year average during the second quarter of 2021. Mr Dalgleish said climatic conditions and dwindling price differentials were the main drivers of the recent drop in numbers. “I think the reason we’ve seen it diminish back down to normal levels has been the combination of the fact that WA has started to get some rain again ... and the differential in price started to evaporate,” Mr Dalgleish said. “You’ve got some rain so that incentive to turn off in the west is not as strong ... and prices have taken off again in the west, so it no longer makes it as economical to transport them across.” The over-the-hook trade lamb indicator in WA was last week sitting at 766¢/kg (carcass weight) — up 45¢ from the same time last year — compared with 936¢/kg in NSW and 910¢/kg in Victoria. WA mutton was fetching 612¢/kg — up 91¢/kg from the same time last year — compared to 691¢/kg in NSW and 707¢/kg in Victoria. Mr Dalgleish said of the 460,864 head transported from WA to the Eastern States in the first half of 2021, sheep accounted for 204,165 and lambs 256,699. “The anecdotal reports from July are that we’re pretty much back to those normal levels or slightly below normal, which is what we saw in June, where it was just under the longer-term average for the month,” he said. “Some of the transport operators I’ve spoken to haven’t seen any kind of lift-up again — it’s steady as she goes.” Mr Dalgleish said last year’s mass exodus — which peaked in October and November — was caused by dry conditions in WA coupled with soaring demand in the Eastern States after favourable winter conditions. “Given the size of the turn-off of sheep through 2019 in NSW, there was a big incentive to restock,” he said. He said last year’s record movements had reduced the supply chain in WA, though the recent return to normality would help counter the shock to the State’s sheep and wool industries. “It is good news for the supply chain,” Mr Dalgleish said. “It’s never a good thing to have an industry that’s shrinking in size if you look to see the flock size as a barometer of the industry.” But WAFarmers livestock council president Geoff Pearson said the drop would have mixed results across the entire market. “There is a short supply, demand is high, and the price is reflective of that,” Mr Pearson said. “As far as going back into a rebuild phase, coming out of a couple of dry seasons, I suppose it’ll be the encouragement for farmers to go back into that space. “But it’s going to be hard because to buy sheep back in to rebuild the flock is going to come at a cost. “Where the sheep numbers have gone, it’s going to be replaced by croppers. “We’re seeing record plantings and potentially a record level of crop this year, so it’s filled the gap.” According to DPIRD, 6900 sheep crossed the Ceduna checkpoint from WA this June. “This is a sign transfers are slowing, however, after only one month of reduced movements it is premature to determine the end result,” a spokesperson said. “Traditionally, the busiest time of year for interstate transfers is during the spring months of September-November, when the spring lamb flush occurs, so time will tell.”