TOM'S MARKET MUSTER: Supply constrictions to impact sheep and lamb in 2025 and opportunity in a stable cattle market
31 October 2024
What's happening in sheep and cattle markets this week? Tom Rookyard musters the details. Pic: AgriShots
An article by Tom Rookyard
Sheep slaughter has been on record pace throughout 2024.
NLRS Sheep and Lamb September quarter slaughter figures were released recently, with the September Quarter seeing 2:1 sheep slaughtered July-September.
Sheep slaughter at a pace of 2 million/head per quarter suggests the national flock is in liquidation, and we have seen slaughter above 2m/head per quarter every quarter since December 2023.
There has not been four consecutive quarters of sheep slaughter over 2m head on NLRS since March 2003, 21 years ago.
My view is that 2024-25 will see sheep slaughter remain above 7m/head, and this overall flock reduction will positively impact sheep and lamb prices throughout 2025.
Cattle market stable, opportunity remains
The cattle market has largely held its position over the past week.
The MLA EYCI has risen 5c to close off the week at 633c (October 31).
Which represents a 13c range across the month of October, and a 65c range since the end of July.
The gap between the MLA Heavy and Restocker Steer indicators has fallen again for the third consecutive month, falling from a 25c gap in September to a 20c gap in October, highlighting store cattle for a weight gain trade remains safe.
While online on AuctionsPlus averages for all weight classes of steers and heifers fell, however the top price for heavier feeder steers 330kgs and above rose last week (October 25) suggesting buyers are happy to pay premiums for top quality.
Australian lamb owning the plate in the US
Australia is winning the battle against New Zealand for market share of lamb meat exported into America.
Over the past 10 years the market share split has been 74% (Australia) to 25% (New Zealand) Comparing USDA figures of Lamb imports (Carcass-weight equivalent); in 1995 the market share split was 50% to 49%, in 2000 it was 61% to 37% in Australia's favour.
Since 2014 Australia's market share has no dipped below 72%, while New Zealand has not been higher than 27%.
Australia beef taking market share from Canada
Beef and veal imports using USDA figures (Carcass-weight equivalent) for the year of 2024 has seen Australia take significant inroads into the US.
Across 2021, 2022 and 2023 Australia has held between 12% and 18% market share of the beef imports, with Canada being the largest importer to the US holding 27%-29% market share.
However, no doubt attractive Australian cattle prices on a global scale has seen across January-2024 to August-2024 Australia make up 21% and Canada only making up 22%.
Mutton demand remains
The MLA Mutton indicator again rebuffed the weight of numbers rising to close off the week at 319c (October 31).
This comes off the back of the largest weekly kill of sheep reported by NLIS since 2006.
The week ending October 25, 2024 saw a reporting of 246,000 head slaughtered, the largest since December 15, 2006, when 250,000 head were slaughtered.
Further to the point of last week, the month of September saw a 50% sheep to lamb ratio - there is a level of demand for Mutton flowing through.
