Sheep farmers destock as dry weather plunges prices

ABC NEWS (Australia)

In the space of just two years sheep and lamb prices have soared to record heights before plunging to lows, in some cases, not seen since 2007. The turnaround in conditions and fortunes is forcing producers to make tough decisions.

Transcript

00:00 Seeking a fresh feed, this mob's heading to a new paddock.

00:11 It may look alright, especially when you're looking out into the background of the film,

00:14 but we're in a 650mm rainfall area and we've had 300mm.

00:20 In the central west of New South Wales, Nigel Kerran's been adjusting to the dry.

00:24 Our de-stock started in March and we've been de-stocking and our last load of animals went

00:30 out yesterday morning and that's it for us now.

00:32 We're down to where we want to be as far as breeding numbers go.

00:37 It's not just the weather that this sheep breeder and cattle trader must contend with.

00:41 It's a culmination of a perfect storm what's going on at the moment.

00:44 You've got oversupply, you've got the market crashing, you've got low labour in processing

00:51 plants and interest bills that have grown.

00:56 Interest bills weren't a problem until the market collapsed.

00:59 The other big one is the fear that's been created by this El Nino prediction.

01:05 I've never had to deal with that one.

01:08 He's not alone.

01:09 Australia's sheep industry is in trouble.

01:12 It's crazy how it's just turned up where most business has expanded in the last seven or

01:18 eight years.

01:21 We were, all our budgets told us to go like hell, great idea, grow your business.

01:26 But now it's turned around with a commodity now that's only worth 30% of what it was.

01:35 It's making it very, very tight to meet those financial commitments in businesses.

01:41 Australian sheep and mutton prices have plummeted this year.

01:44 Average price indicators have fallen by as much as 80%.

01:49 It's been a steep learning curve for Tana Morris, who's completing a uni placement at

01:53 the Cairns-Pomerino stud.

01:55 I'm just starting off my career in ag and it's pretty mind-blowing how quickly things

02:00 can change with even just six months.

02:02 I think it is uncertain, I think is the word.

02:06 People are not so sure what they should be doing with stock, especially with prices wise.

02:13 I think the word is uncertain.

02:15 But at the moment, there's not a lot of ways to run.

02:20 And this is the third downturn I've seen in sheep and cattle.

02:26 And every time you look back at it, it was really bloody ugly whilst you were in it.

02:33 And if it happened to coincide with drought, then that made it even worse.

02:37 And for me, it's just here we go again.

02:39 [BLANK_AUDIO]

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