The latest Sheep Producer Intention Survey (SPIS), conducted by Meat & Livestock Australia (MLA) and Australian Wool Innovation (AWI), offers valuable insights into the expected behaviours of Australia’s sheep producers for 2024.
The survey, conducted three times a year, provides a comprehensive overview of various aspects of sheep production, including producer sentiment, lamb numbers, sales timing, grain feeding, breed demographics, and expectations regarding labour, prices, and input costs.
Key Findings of the Survey
Timing of Lamb Sales:
The survey indicates that 49% of the 2023 lamb cohort is expected to be sold in the first half of 2024, an increase from 46% in 2023. This shift suggests a more even distribution of lamb supply throughout the year, with a lower percentage of lambs being sold this spring.
Despite Australia recording its highest-ever lamb slaughter figures last week – close to 500,000 head – this retention of lambs could mean subdued prices due to sustained supply.
Producer Sentiment:
Sheep producer sentiment in both the wool and sheepmeat sectors has declined over the past year. The sheepmeat industry sentiment has fallen significantly, from +67 in October 2023 to -42 points this October. The wool industry has also seen a drop in sentiment, albeit less severe, from +12 last year to -15 points now.
Prices and weather conditions are the main factors contributing to this low confidence. Interestingly, the relatively higher sentiment in the wool industry compared to the sheepmeat sector may lead to a shift in breed demographics, potentially reversing the recent trend towards more meat-breed sheep.
Sales Channels:
The survey also gathers data on the sales channels used by sheep producers. On average, producers use 1.3 different sales channels, with 50% using saleyards, down from 58% last year.
There has been an increase in the use of over-the-hook arrangements and forward contracts, up 25% and 50% respectively, driven by seasonal conditions and the desire to secure processor space and set prices. Online channel usage has decreased as the flock rebuild matures and restockers become less active.
Grainfed Lamb:
The number of producers finishing lambs on grain has risen by 30%, from 12% to 16% this year. This increase is partly due to the price difference between store and light lambs, and heavy lambs.
Breed Demographics:
Despite higher sentiment for the wool industry, 2023 marked the first year where more meat breed lambs were born than merinos. Prime lambs accounted for 38% of the lamb cohort, surpassing merino lambs, which made up 37%.
These insights from the Sheep Producer Intention Survey provide a detailed outlook for lamb producers in 2024, highlighting key trends and shifts in the Australian sheep industry. The data reflects the evolving dynamics of the sector, offering guidance for producers as they navigate the upcoming year.
