Where to for goatmeat prices?

While the decrease in goat prices over the past nine months has caused concern among some producers, Australian goat processors say the price has opened some export doors for the industry.

Any change in export demand is significant, given the Australian goatmeat industry is heavily reliant on the export market – only about 9% of domestic production is consumed in Australia, with the rest exported to overseas markets.

MLA’s National Livestock Reporting Service (NLRS) data shows since mid-2022, the average over-the-hooks price has dropped from over $9/kg carcase weight (cwt) to below $4/kg cwt.

The price correction has resulted in many former export markets re-emerging, according to Campbell McPhee, Managing Director of Western Meat Exporters (WME), Charleville, Queensland.

WME processes 13,000 to 15,000 goats weekly, and exports 86% of its product with the balance supplying an ever-increasing domestic market.

“As the goatmeat price looks to find a balance, it has certainly opened up more markets around the world and it has been a real advantage to the industry to help with throughput,” Campbell said.

“All of a sudden, some of our old customers are able to come back in and afford the product, so the actual movement of goatmeat is going back to where it used to be before the COVID-19 pandemic.

“Some of the old markets which are re-emerging and able to take greater volumes include Japan, the Caribbean, Canada, Taiwan, mainland China, and Vietnam. All these markets have their hand up again.

“Goatmeat availability in the Caribbean is one of the biggest growth areas and we’ve been able to regain the Canadian market recently. 

“The Taiwan market used to be one of our biggest and best markets, and hopefully we can regain that trust and relationship because they’re concerned the price will go back up again, but hopefully we can find that balance and affordability for the product.”

Campbell said exporters were hopeful that under the ECTA, goatmeat will be added to the list of agricultural products that have had the 30% import tariff levy removed, including Australian sheepmeat.

“All these things mean we don’t have all our eggs in the one basket which we have done in the last few years,” Campbell said.

“If you want to export product to all corners of the world, it’s got to be affordable.”

There were a range of factors which contributed to the fall in goat prices from unsustainable highs.

Goat wasn’t the only red meat to experience a price fall in 2022, with sheep and lamb prices softening due to a large uptick in supply and changing buyer demand.

“We were going into a northern hemisphere summer, shipping containers were moving much more slowly, and goatmeat was arriving late with cheaper meat getting shipped behind it and causing a domino effect,” Campbell said.

“China’s zero-COVID-19 policies involved ongoing lockdowns and saw product being sourced from other proteins, which had an impact.

“All red meat, not just goatmeat, is under pressure. However, the Australian goat industry is starting to find a balance to meet global demand and it’s an exciting time.

“If you go back 20 years when the goat price was 50 cents/head, look at how far we’ve come since then, it’s a wonderful thing.”

Impact of factors in the US

Thomas Foods International (TFI) National Smallstock Manager, Paul Leonard, said it is important to understand consumers in North America – the largest market for Australian goatmeat – to also understand the price correction.

As a vertically integrated business, TFI is a net exporter and importer of skin-off Australian goatmeat into the North American market.

“Processors don’t set the price. The price is set by the consumer and the reality is they have spoken with their wallets,” Paul said.

“When you look back over the last four or five years, goats did become over-valued from a consumer perspective.

“Historically, goat often followed a similar trajectory to what light sheep or mutton did for many years, but then if you go back two years, we had goatmeat that was dearer than Australian lamb.

“You can’t have goatmeat making more than Australian lamb when you look at the end consumer, who are predominantly from ethnic communities, and their discretionary spend and willingness to pay for certain proteins and cuts of meat. You have to stay price competitive against other proteins or it just becomes a niche product.

“It has been a more severe price correction than I think anyone anticipated. The combination of inflation and the drought in the US impacted prices quickly and severely.

“As a result, we’re working through an inventory of frozen goatmeat in the US, which is a medium-term challenge.

“Because of the US drought, beef mince is very cheap and much cheaper than Australian beef. Once the drought breaks, cattle will quickly go from being cheap to expensive, and once that happens, it will be another trigger for consumers in that market to come back to goatmeat,” Paul said.

Looking ahead

TFI has been processing 3,000 goats/week for the past two months, mainly at its specialist goat processing plant at Bourke in NSW. The Bourke plant has just been approved for US listing, and TFI expects to be able to increase production at Bourke to 2,000 to 3,000 goats/day in the next few months as the business grows its workforce.

TFI’s Lobethal plant in SA hasn’t processed goats for the past three to four months, focusing on sheep and lamb instead.

Paul said once the new pricing of goat reaches the end consumer in North America, it will be another trigger to enable them to consume more Australian goatmeat.

“I think it’s a 12-month cycle at the moment. At the end of that 12 months, where will goats sit? I think it has overcorrected, I don’t think the price will go back up to $9/kg cwt, but it will sit somewhere between where it was and where it is now.

“I don’t think we’ll find where the goat price will sit until we get through short-to-medium term issues of moving inventory.

“I’d say to people, still have confidence, but there will be some uncertainty. By the same token, anyone who has been involved in the goat industry in the last five to six years would have done extremely well and be able to ride it out,” Paul said.