Options after live trade, but industry will still suffer

Industry will struggle to absorb numbers is live sheep trade phased-out


Sheep
Simon Hill has been pushing hard to get the industry to ship his wethers across country, with prices in the east $7.50 per kilogram.

Simon Hill has been pushing hard to get the industry to ship his wethers across country, with prices in the east $7.50 per kilogram.

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Sheep producers in WA say without the live sheep industry, prices through airfreight and processing alternatives will most likely drop.

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It may be only a matter of time before sheep producers face the end of the live sheep trade, with a proposed phase-out period of five years. 

And although producers are looking at alternatives, they know the industry will struggle to absorb numbers. 

Yet Simon Kelsall, Merino producer from Boddington, WA, says he still holds hope for the industry. 

Joining 8500 Merino ewes a year, the second generation farmer said the industry is a major component of his and all WA sheep enterprises, and the loss will see everyone affected. 

“It underpins the the value of the sheep, it’s another market. Everybody needs it,” Mr Kelsall said. 

But he said the airfreight industry, where the animal is slaughtered in Australia and the carcase is boxed and sent by air, is making inroads, however small. 

“The industry is probably slowly transitioning into airfreight, but it all takes time,” he said.

“There is still a certain segment of the market overseas that want the animals live, so the industry has to cater for all of it.”

Turning off about 4000 wether lambs a year, traditionally Mr Kelsall would have kept his wethers until they reached 1.5 year-old, after that they would have been sent for live trade.

But this year he sent a quarter to airfreight with the balance sold to another grazier with the intention of putting the extra condition on them before they are ready for live export. 

“I am aiming to breed more ewes, so with the higher breeding numbers, I am trying to sell all the wether lambs straight off mum,” Mr Kelsall said. 

“Whatever I have up good enough, will go straight to airfreight.” 

For his efforts this year he returned $80 per head. 

But in the past, when they were kept to go on the ships, he would receive about $120 per head, albeit six to eight months later. 

“So we are now selling them straight off mum and letting someone else take that $40,” Mr Kelsall said.  

“But at the moment it probably more like $20 or $15 because they are only selling for $95 to $100.” 

Even though Mr Kelsall says the transition into the airfreight category is a natural progression and will absorb some of the numbers, there is still the real factor that as it grows, the price of the animal will lesson. 

“The airfreight job at the moment is only so big, and can only cater for so much,” he said.

“Once everyone starts using airfreight then the price will come back too.” 

And according to Mr Kelsall if you take away the live trade equation, that $80 might come back to $60 or $50. 

Mr Kelsall warned in times of drought, the live trade industry was still hugely beneficial.  

“If we had a drought in the west at the same time much of the the east was drought declared, I do not know where all the sheep would have gone,” Mr Kelsall said.  

“The live shipping trade is a relief valve to get rid of sheep.”

Mr Kelsall believes the transition period would put shipping companies in difficult positions, and expects it would wind down quicker than the five-year time frame. 

“I can’t see them (shipping companies) investing in their ships or investing to make their industry any better,” Mr Kelsall said.

“If they know they only have five years left, they are going to run their ships down to even worse conditions and more disasters could unfold in that scenario, because they aren’t going to invest in it.” 

Simon Hill, who turns off about 2500 wethers a year from his self replacing flock of 5000 ewes at Katanning, WA, said the sheep simply need to go somewhere. 

One alternative is the absorption through processors, but the processing capacity in the west doesn’t meet what they can supply and if it does he said, “they get skinned big time”.  

“Connectivity between the east processors is what is needed,” Mr Hill said. 

“In my experience, processors will take advantage of the lack of competition. The only thing that is balancing it is processors in the east.”

Mr Hill has been pushing hard to get the industry to ship his wethers across country, with prices in the east $7.50 per kilogram.

“It is the only thing supporting the prices here in the west,” he said. 

“They dropped it to $5.80 and as soon as all the sheep started going across the Nullarbor, they started to come back up, now they are $6.40 and there is no other reason other than competition.”

Mr Hill said the vacuum of competition left by live export will be a huge cost to WA’s sheep industry.

“We need a concerted effort to make the connection east, and make that transport across the Nullarbor as animal welfare friendly as we can,” he said.

“Without the connectivity to the east, the west coast processors will slaughter us as well as the sheep.” 

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