CONCERN about the ongoing dry conditions in the southern part of Australia and the effect this will have on the ability to procure quality lambs to satisfy export customer need has led to major processor Thomas Foods International offering attractive contracts for May, June and July delivery.
Subscribe now for unlimited access to all our agricultural news
across the nation
or signup to continue reading
National livestock manager Paul Leonard said that the south is shaping up for one of the latest seasonal breaks seen in a long time.
Mr Leonard said that traditionally the south gets an Easter break and if hasn’t come through by Anzac day the concern levels start to rise.
He added that coming out of a very dry summer and into a dry autumn this year an earlier than normal break would have been very welcome but at this stage the long term weather forecast is saying there won’t be a break before Anzac day.
With the dry conditions pushing higher numbers of lambs onto the market at the present time, he said that they felt it necessary to put something out there that was attractive enough for producers to hold their lambs a bit longer in the face of the prevailing high cost of grain.
“We had to do something that secured our obligations to our overseas customers,” he said.
“We couldn’t take the risk that lambs may or may not be there in the middle of winter.”
The subsequent offer which did not differentiate between north and south was 465c/kg for an 18-32kg lamb in May, 480c/kg in June and 500c/kg in July.
This applies to Tamworth in NSW and Murray Bridge and Lobethal in South Australia.
Wallangarra was not included in the arrangements because of the relatively small daily kill and the specific type of lamb required there.
Mr Leonard said he believed they had to provide an incentive for people to supplementary feed or grain assist because the only areas in Australia lambs are going to come from in May, June and July off natural pasture are the New England, some areas of the Central Slopes and Plains and some areas of the Murray Irrigation Area where there had been some rain in the last six weeks or so.
“I feel if we hadn’t gone out with a reasonable price producers would not have had the impetus to bother feeding them with the price of grain where it is.”
Driving this of course is the fact that Thomas Foods International exports lamb products to eighty countries around the world.
Mr Leonard said out of this came a responsibility to meet customer expectations around surety of supply.
The uptake has been tremendous with around 190,000 lambs in NSW and about 120,000 in the south.
At around 50 per cent of requirements, this has provided a comfortable position as there are still normal over-the-hooks trading and saleyards to operate out of to source the balance.
Mr Leonard said if the job gets cheaper they will average down and if it is dearer they will average up.
He said if they came out with much less he didn’t think they would have got the response that they did and having two and a half days per week covered at each of those three plants for those three months addresses a major part of the looming supply risk.
Mr Leonard said the July contract filled within about four days at Tamworth while overall it took about two weeks for all of the contracts to fill.
As well as the immediacy of the supply problems in the winter months, he also expressed concern with the impact of the season on the timing and quality of new season lambs.
“Just on the fact that we have had a prolonged dry and we haven’t had an opening rain, I can see us not getting our new season lambs now until probably the first week in September.”
It’s all going to run late now no matter what happens and every week that it doesn’t rain becomes critical because in southern Australia the country will get too cold.
“Getting that burst of feed away before the winter sets in is an important factor.”
