A report exploring Australian sheep market structures and systems has acknowledged the significant price differences paid by meat processors in Western Australia for mutton, lamb and skins, as compared to the prices paid for the same products in the eastern states.
The Sheepmeat market structures and systems investigation report, released by Sheep Producers Australia, compiled by Mecardo and funded by Meat and Livestock Australia, had its purpose in responding to the finding of the ACCC’s Cattle and Beef Market Survey, in the belief that there are similar disparities between market places and reporting systems in the sheepmeat industry.
WAFarmers Livestock Executive Officer Kim Haywood said the report clearly identified that trade lamb and skin values are considerably lower than other states, and have been so for many years.
“The report identified that prices paid in WA for trade lambs were consistently below prices paid at peak times for trade lambs in the southern eastern states, with a 10 to 20 per cent price lift compared to 20 to 60 per cent price lift in southern eastern states,” she said.
“The largest variations in skin values appear to come out of the saleyard system, a system which is vital to the continuing competitive nature of the WA livestock industry. This makes it difficult to ascertain exactly what values are put on skins when offered as sale lots.
“While there are challenges involved in the skin trade in WA, we find it impossible to justify these local issues being the only reason for such a massive difference in skin values between WA and the east.”
Ms Haywood said there was a need for price reporting that truly reflects the actual prices being paid at saleyards, over the hook, and direct.
“Online platform data prices are not analysed or included in existing price reporting platforms. Their inclusion would significantly improve the overall accuracies of all price reports for all sheep types,” she said.
“There would be strong benefits in standardising the collection times and sheep categories for over the hook price reporting, as this would allow more consistent analysis and comparisons to keep buyers and sellers better informed.”
“Live export prices are strongly correlated and are generally a better price indicator for trade lamb prices in WA compared to saleyard, over the hook or direct price reporting at present.
“The development, publication and promotion of an ‘Endemic Disease Information System’ will also help to improve carcase price transparency, by clarifying the understanding of carcase downgrading issues impacting carcase weights and trimming processes.”
Ms Haywood said the issue had received good support on a local level, with Hon. Darren West MLC and Hon. Rick Mazza MLC both having raised the issue in State Parliament prior to the report being undertaken.
“We will now work closely with SPA, state farming organisations and other industry stakeholders to draft an industry response to the inquiry.”
A copy of the report can be found here.