The Real Reason for the Lift of the Saudi Livestock Ban: Shortage and high prices elsewhere
International Desk
November 21, 2009
Somali livestock traders see through the Saudi policy and fear political closure will be imposed soon again.
Aussie live sheep exports falling short.
Countries like Romania are increasingly being relied on to make up for Australia´s sheep live export shortfall because of continual downsizing in the nation´s flock, which has fallen to a 104-year low of 71.6 million head.
LiveCorp chief executive Cameron Hall told Rural Press this week that for "18-months to two years" the Middle East had increasingly been sourcing sheep from Romania, Syria and Somalia and in some cases switching to Australian beef in a bid to satisfy consumer protein demand.
The extent of Australia´s sheep flock demise came to light last week when an Australian Bureau of Statistics report revealed that sheep numbers had retracted by 38 per cent in the past decade, rivaling March 1905 figurers when there was estimated 65.8 million sheep.
While unable to quantify the extent of market share loss, Mr Hall said he expected Australian live export figures to sink to 3.5 million sheep this financial year, down from more than 4 million in 2008-09.
"I said two years ago, that if we had 5.5-6 million sheep and vessels available to supply we would be able to market them all to the Middle East," he said. "This situation has not changed."
There are also concerns that the high price paid by live export buyers for Australian mutton which increased by $15 in the 12 months to September this year to $88, was impacting on demand.
"Along with the dollar now at 93 odd cents it means price delivered to market place has increased substantially."
But Mr Hall maintained that the long term outlook for Australia´s sheep export market to Middle East remained strong, with high prices set to stay.
With rising wool prices and sustained strong prices for prime lambs expected to remain, he said sheep were clearly the stand-out industry to be in and questioned why producers were not taking notice.
"The sheep supply issue is not one just for live exports - it is one for the whole industry – from meat processors to wool spinners. They must work together to provide strong fundamentals for people to re-invest in sheep."
Mr Hall´s comments coincide with new figures from Meat and Livestock Australia showing saleyard prices for restocker crossbred ewes had soared by 40-48 per cent across south eastern Australia for the year to November compared with the same month last year.
In NSW prices hit an average of 245c/kg, South Australia 275c/kg and Victoria 269c/kg.
Elders Whycheproof, Vic, manager Jim Coffey said current young Merino ewe prices would also mirror such price rises, with buyers "finally" realising the extent of the breeder ewe shortfall.
"From autumn onwards I can´t see where the sheep are going to come from," he said.
Mr Coffey said buying activity had not been skewed towards either crossbred or Merino ewes "any differently than other years."
Elders Bendigo Will Turner, an agent with 44-years experience in the sheep industry predicted breeder ewe market was in dire shortage, pointing at the once booming monthly Yelta sheep sale yardings of 20,000-30,000 head 20 years ago, now back to an annual sale of 12,000 head.
A2009 Department of Agriculture and Food (DAFWA) flock demographic report revealed a three percentage point rise in the national average lamb marking rate towards prime lamb production.
The percentage of Merino ewes joined to Merino rams dropped from 63pc in 2004 to 59pc this year.
DAFWA report author, Dr Kimbal Curtis said it was the first year joinings had dropped below 60pc and "there would have to be at least two years at this rate before the flag was raised."
Aussie live sheep exports falling short.
Countries like Romania are increasingly being relied on to make up for Australia´s sheep live export shortfall because of continual downsizing in the nation´s flock, which has fallen to a 104-year low of 71.6 million head.
LiveCorp chief executive Cameron Hall told Rural Press this week that for "18-months to two years" the Middle East had increasingly been sourcing sheep from Romania, Syria and Somalia and in some cases switching to Australian beef in a bid to satisfy consumer protein demand.
The extent of Australia´s sheep flock demise came to light last week when an Australian Bureau of Statistics report revealed that sheep numbers had retracted by 38 per cent in the past decade, rivaling March 1905 figurers when there was estimated 65.8 million sheep.
While unable to quantify the extent of market share loss, Mr Hall said he expected Australian live export figures to sink to 3.5 million sheep this financial year, down from more than 4 million in 2008-09.
"I said two years ago, that if we had 5.5-6 million sheep and vessels available to supply we would be able to market them all to the Middle East," he said. "This situation has not changed."
There are also concerns that the high price paid by live export buyers for Australian mutton which increased by $15 in the 12 months to September this year to $88, was impacting on demand.
"Along with the dollar now at 93 odd cents it means price delivered to market place has increased substantially."
But Mr Hall maintained that the long term outlook for Australia´s sheep export market to Middle East remained strong, with high prices set to stay.
With rising wool prices and sustained strong prices for prime lambs expected to remain, he said sheep were clearly the stand-out industry to be in and questioned why producers were not taking notice.
"The sheep supply issue is not one just for live exports - it is one for the whole industry – from meat processors to wool spinners. They must work together to provide strong fundamentals for people to re-invest in sheep."
Mr Hall´s comments coincide with new figures from Meat and Livestock Australia showing saleyard prices for restocker crossbred ewes had soared by 40-48 per cent across south eastern Australia for the year to November compared with the same month last year.
In NSW prices hit an average of 245c/kg, South Australia 275c/kg and Victoria 269c/kg.
Elders Whycheproof, Vic, manager Jim Coffey said current young Merino ewe prices would also mirror such price rises, with buyers "finally" realising the extent of the breeder ewe shortfall.
"From autumn onwards I can´t see where the sheep are going to come from," he said.
Mr Coffey said buying activity had not been skewed towards either crossbred or Merino ewes "any differently than other years."
Elders Bendigo Will Turner, an agent with 44-years experience in the sheep industry predicted breeder ewe market was in dire shortage, pointing at the once booming monthly Yelta sheep sale yardings of 20,000-30,000 head 20 years ago, now back to an annual sale of 12,000 head.
A2009 Department of Agriculture and Food (DAFWA) flock demographic report revealed a three percentage point rise in the national average lamb marking rate towards prime lamb production.
The percentage of Merino ewes joined to Merino rams dropped from 63pc in 2004 to 59pc this year.
DAFWA report author, Dr Kimbal Curtis said it was the first year joinings had dropped below 60pc and "there would have to be at least two years at this rate before the flag was raised."
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