State’s ‘solid’ slaughter volumes buck the national trend

WA meat processors are bucking the national trend, with slaughter chugging along at a healthy rate as Eastern States abattoirs face declining productivity caused by Omicron-induced worker shortages.

That’s according to the latest figures from Meat and Livestock Australia, which reveal weekly average sheep and lamb slaughter in the Eastern States has fallen 18 per cent this month compared with January last year.

But it’s a different story in WA, where average weekly sheep and lamb slaughter has dropped just 3 per cent, down from 66,000 head in January 2021 to 65,000 head in January 2022.

In the third week of January, WA lamb slaughter volumes were 5 per cent below the same time last year, but 2 percent above the same week in 2020.

With analysts predicting a domestic meat shortage as Omicron disrupts food supply chains, the outlook for WA is much better according to MLA analyst Stephen Bignell.

”WA lamb slaughter is really, really solid at the moment. . . (because) WA has been able to run at an unimpeded processing capacity,” he said

“There is definitely supply there.

“Given that we export, as a county, well over 60 per cent of product, there’s definitely the ability to meet at least WA domestic consumption.”

WA currently accounts for about 15 per cent of national sheep and lamb slaughter.

Beef slaughter has also plummeted nationally, down about 30 per cent compared with January 2021 and 50 per cent compared with January 2020.

Yet in WA — which accounts for about 5 per cent of national beef slaughter — it has only dropped about 7 per cent compared with January last year.

“WA is still far outperforming what we’re seeing at a national level,” Mr Bignell said.

Thomas Elder Markets analyst Matt Dalgleish said the McGowan Government’s unexpected and widely unpopular border closure extension, announced last week, would likely benefit WA meat processors by keeping the spread of Omicron at bay.

“The rapid spread of the Omicron variant has seen the nation’s processing sector further hampered by workforce constraints, with some (Eastern States) abattoirs reporting staff absences of 30 per cent to 50 per cent,” he said.

“The impact of the spread of the virus within meat processing has been keenly felt across the East Coast, with significantly reduced slaughter volumes being seen since the start of 2022.

“Over in WA, the combination of tight border policy and effective control of the spread of Omicron has seen limited disruption to the meat processing volumes.”

It has also been a good month for WA sheepmeat producers, with WA saleyards trading at a premium to the Eastern States.

Last week, for example, heavy lambs were trading at 892¢/kg at Katanning Regional Saleyards — a 40¢ premium compared with MLA’s National Heavy Lamb Indicator.

“There’s some profits to be made in WA lamb at the moment,” Mr Bignell said.

“It’s a really positive story for WA producers.”