Lamb prices high but producers still lucky to break even

Kingsthorpe producer Kirk Penfold said a 14.5% spike in lamb and mutton prices would be little help after such a tough start to the season.
Kingsthorpe producer Kirk Penfold said a 14.5% spike in lamb and mutton prices would be little help after such a tough start to the season. Emma Boughen

THE Australian sheep and lamb industry might be off to a blistering start this year, according to the Australian Sheep Update, but Kingsthorpe producer Kirk Penfold reckons perhaps not in the way they were thinking.

After a hot and dry summer, his production was well behind schedule and, even with a 14.5% jump in lamb prices since the last quarter, he was not sure there was any profit to be made when this season's lambs headed for the sales.

His oats, which would usually be feeding the sheep by this stage, were barely out of the ground and some had yet to even sprout.

That meant months of hand feeding and, if it had not been for the 100-odd millimetres of rain pushed through by Cyclone Debbie, things would have been even worse.

Meanwhile, the Rural Bank and Rural Finance's April 2017 Australian Sheep Update showed a combination of strong demand and low supply helped prices for all categories of lambs more than double the five-year average increase of 6.5% in the space of just three months.

But Mr Penfold believed far from being an exciting price spike, the figures simply reflected the price producers should be getting every single day.

He said Australian consumers, often helped along by major supermarket price wars, believed they should be paying less for quality Australian produce rather than more.

"What we've actually got to do is get people to accept is that for the quality of food we're able to access in Australia, we should be actually paying more, not less, as consumers," he said.

"If we want to be eating to the quality that we are, we've got to pay a bit more.

"Milk is a case in point.

"We can produce the cleanest milk in the world and other countries like China recognise that and are prepared to pay more for it, so how come Australians are not prepared to pay for it?

"Every time you turn around another small producer has shut down, so if we don't look out we will end up having to import it."

He said apart from a few patchy areas, most Queensland producers were in the same boat.

He said the troubles did not just stop at pricing and rainfall, because one of the biggest problems in the Queensland sheep industry was the onslaught of wild dogs.

And without consistent fair pricing, producers would struggle to see the value of investing in exclusion fencing.

"I think if prices are good enough over the long-term, a producer could probably use exclusion fencing to a greater degree," he said.

"But for a producer with only 300 ewes to put in $40,000 worth of fence is too hard.

"I guess over the long-term if there was enough value in the stock, it becomes economical to do that."

Topics:  lamb prices

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