Saleyard prices higher in 2007-2008

by Editor
Friday, December 14, 2007

Saleyard prices for cattle, lamb and mutton are forecast to average higher in 2007-08, as an expected improvement in seasonal conditions results in reduced turn-off.

The recent release of the Australian Bureau of Agriculture and Resources Economics’ (ABARE) Australian commodities, forecast saleyard lamb prices to average 2% higher during 2007-08, with cattle prices edging 1% higher.

After a very dry winter and early spring, the welcome return of wet conditions across eastern Australia during November has provided the impetus for an improvement in the season, with further above average falls forecast throughout summer.

ABARE forecast lamb slaughter for 2007-08 to be back 4% on 2006-07, at 19.4 million head. With slaughter for July to October already up 11% on the previous year, and November figures expected to be very high again, supplies are likely to tighten significantly in early 2008. The tighter numbers into next year should push lamb prices higher.

The improvement in seasonal conditions is also forecast to see sheep turn-off tighten significantly for 2007-08, with slaughter back 19%, to 10.8 million head. The improvement in wool prices, combined with the ongoing favourable outlook for lambs, is expected to see producers beginning to rebuild drought depleted flocks. Saleyard mutton prices are forecast to average 21% higher for 2007-08.

Australian cattle slaughter for 2007-08 is forecast to be back 3% on the previous year, to 8.8 million head. The decline in the number of heavy grainfed cattle entering the market is expected to ease beef production by 4%, with exports for the year falling 5%. Shipments to Japan and Korea are forecast to be down 6% and 17%, respectively, while sluggish demand from the U.S. will contribute to volumes dropping 4%.