State of the state WA

03 February 2012

Hot conditions across WA, with localised thunderstorms have followed on from a wet end to 2011. Dry feed quality has deteriorated, but this has not encouraged those with stock to sell. Regrowth in stubbles, large supplies of feed grains and plantings of summer forage crops have reduced the pressure for the stock sell off usually witnessed at this time of year in the west.

With the turn around in seasonal conditions, producers are now focussing on rebuilding the flock – a stark contrast to the sell off caused by the prolonged drought in previous years. With a low flock and rebuilding intentions, the impact on numbers available to processors, feeders and restockers is evident. Small physical market supplies are resulting in strong competition from all sectors of the livestock industry. Processors, feeders and restockers are also concerned about the actual level of livestock numbers remaining on farm.

Prime lamb and cattle prices are at historic highs across the markets reported by MLA’s NLRS in WA. Producers, however, are either unable or unprepared to increase supply. Prime lamb weights have increased, which indicates some producers are confident of maximising returns by feeding lambs to heavier weights.

Total consignments of 22,500 sheep and lambs for the two selling centres last week in the west reflect the low supplies and displays why prices for prime lambs have ranged from 500¢ to 550¢/kg cwt over recent months. Less than 10,000 lambs per week at this time of year is historically low. Export processors have limited markets at these prices and have had to reduce production by close to 50%.

The increased optimism among producers and their desire to restock has resulted in strong competition with processors for suitable ewe supplies, and an increase in ewe prices to around $90/head.

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