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Australian Slaughter Lamb Market to Weaken

24 July 2013

AUSTRALIA - The average financial performance of Australian slaughter lamb producing farms is expected to weaken in 2012-13 but remain above the long-term industry average.

This is due to significantly lower prices received for slaughter lambs, sheep and wool despite increased turn-off as seasonal conditions become drier according to the Australian lamb: financial performance of slaughter lamb producing farms, 2010-11 to 2012-13 report produce by ABARES.

The report says that there are around 18 800 Australian broadacre farms that sell more than 200 lambs for slaughter.

Most of these farms are mixed enterprise, deriving a substantial proportion of their receipts from cropping, beef cattle, sheep and wool, as well as from the sale of slaughter lambs.

Average farm cash income for Australian slaughter lamb producing farms is projected to decrease from an average of A$172,000 per farm in 2011-12 to A$139,000 per farm in 2012-13, still around 13 per cent above the average for the 10 years ending 2012-13 in real terms.

Australian slaughter lamb producers are estimated to be in an above average financial position in 2012-13. Improved seasonal conditions in 2010-11 and 2011-12 have resulted in increased sheep and lamb numbers. High farm cash incomes in these years have resulted in record investment in land, vehicles, plant, machinery and improvements in recent years.

This should provide a basis to further increase farm productivity and, together with strong farm equity, underpin farm financial performance over the medium term despite dry seasonal conditions and lower prices in 2012-13, the ABARES report says.

Further Reading

You can view our feature on the report by clicking here.

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