Goat market looks for new level

Over-the-hooks goat prices have come back by just over 30 per cent in the past month, with Meat and Livestock Australia’s indicator this week sitting at 457 cents per kilogram carcase weight, compared to the peak of 683 in early July.

Exporters point to the rising Australian dollar impacting the competitiveness of the product against alternative proteins, particularly in our main market the United States.

They do say, however, that global demand is still fundamentally very solid and should in fact ramp up somewhat once the Northern Hemisphere’s winter sets in.

MLA’s goat industry expert Julie Petty said the strengthening Australian dollar, which has hovered around the US79c mark for the past month - it’s highest level since May 2015 - had driven the correction.

Warm and dry conditions in goat supply regions of Australia had lead to more trapping and destocking earlier than expected, and that coincided with weaker demand during the US summer, a normal trend where goat is a winter dish, she said.

For the first time in a lengthy period, demand was no longer outstripping supply.

The Eastern States goat slaughter for the week ending September 4 was just 15,444, back 44pc on this week last year and down from the 27,900 head of mid August.

Declines in excess of 60pc were recorded in South Australia and Queensland, where the country’s larger goat processors operate.

Goat prices had been on a continual upward trend since the start of 2014 when the indicator was just over 200c.

With prices this year hitting such an unprecedented, and higher-than-anticipated, peak, concerns were raised about an impending big drop in supply in Australia given the incentive to send animals to slaughter earlier than normal.

“Minimum slaughter weights for some plants have decreased this year which is definitely an issue,” Ms Petty said.

“The slaughter of young animals will have an impact on the national herd and this is something we are monitoring and trying to get a better handle on.”

Returns to producers were “absolutely” still at a level to be encouraging investment in the industry, she said.

“Anecdotally we are hearing that there is a steady increase in the number of producers moving away from harvesting and into semi-managed operations,” Ms Petty said.

“Again, it is something we are monitoring.

“There has been a huge increase in inquires from people wanting to know how to get into goats as well.”

Simon Linke, export manager with Adelaide-based red meat exporters Samex, said the heavy slaughter rates this year had been a combination of the record prices on offer to producers and the fact processors had looked to an alternative with the short supply of mutton and lamb to kill.

At the same time, in the US, where around half Australia’s goat meat is consumed by a growing Hispanic and expatriate population, the product was becoming increasingly expensive relative to chicken, pork and red meat, he said.

Mr Linke believes the goat market drop will be an aberration that lasts only a short period, maybe just months.

However, the continual upward trajectory was probably close to finished and goat prices would find steady ground, he said.

“There has definitely been a shift towards farming, with a lot of people putting goats onto better pasture for weight gain this year,” he said.

“But it is still very difficult to gauge just what supply is out there.”