AUSTRALIAN sheepmeat bodies have distanced themselves from comments by exporters that businesses were becoming unsustainable because of soaring sheep prices, the elevated Australian dollar and the declining sheep flock.
Tatiara Meats managing director Willem Van Doon made the comment this week just days before Vion Food group announced the sale of TMC to Swift Australia and after it was forced to stand down its 400-strong workforce on Friday because of insufficient supply.
This was the first time staff had been stood down during December in the history of the abattoir.
In the same week, Fletcher International’s Dubbo plant retrenched 300 staff and according to the Australasian Meat Industry’s Employees Union more than 1500 meat processing workers had either been stood down or were working reduced hours this year.
Sheepmeat Council of Australia executive Ron Cullen this week backed away from suggestions that lamb prices had become to high.
“Australian lamb and mutton is a high quality product that will continue to sell as long as the demand is there,” Mr Cullen said.
“Sheepmeat producers should focus on building their flocks to enjoy the long-term gains of ongoing good returns.
“We see sheepmeat prices holding well into the future.”
As the staff cutbacks were being made, the national lamb indicator rose to 420 cents a kilogram last week, up from 385c/kg a month ago.
Across saleyards, lamb traded a dollar a kilogram dearer last month than at the same time last year.
Meat and Livestock Australia (MLA) sheepmeat analyst Kara Tighe, also rejected calls that the export market was destined for a significant price downturn, saying demand would continue to cushion dollar and supply pressures.
“Even since the dollar has been hovering around US90 cents, export demand has not come back,” she said.
But she agreed exporters were facing unprecedented challenges on top of the dollar constraints, with competition from live export and restockers driving up prices.
This, she said, would create "some easing of prices" from the record highs of 2009.
AuctionsPlus general manager Gary Dick agreed prices would back off “a little bit” next year, but said the Australian lamb market had become a different industry led by specialised breeders and finishers prepared to seek out markets and it could handle minor price fluctuations.
“We normally would have one sale on Tuesday and Thursday but in the last three weeks we have had three sales on Tuesday and two on Thursday with up to 200 people logging on,” he said, noting sheep and lamb throughput on AuctionsPlus was up 30pc on last year.
Lamb exports from January to November reached 151,800 tonnes, 11 per cent higher compared with the same time last year.
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