Ag News

South Australian Lamb producers kicking goals

  • By: Farm Tender "Prime"
  • Dec 26, 2017

South Australian lamb producers have enjoyed a stellar 12 months as part of a nationwide boom that has seen the average income of Australian lamb-producing farms rise to a 20-year high, according to the latest BankSA Rural Price Index.

The index shows that the average South Australian lamb-producing farm recorded a cash income of $358,000 in 2016-17, which is almost a third higher than the national average of $265,000.

Profits are also up with the average South Australian lamb-producing farm estimated to have earned a profit of around $180,000 in 2016-17, compared to the $140,000 average profit seen across Australia.

“Lamb-producing farms are certainly a good news story for the state’s agriculture industry thanks to improved seasonal conditions and higher prices for lamb,” said BankSA Regional Executive Manager Peter Panas.

“And importantly, the good times look set to continue. In fact, it’s projected that the saleyard price of lamb will increase by 6% in 2017-18, which reflects the rebuilding of existing flocks and strong ongoing demand for lamb in Australia’s key export markets.

“Indeed, the Federal Government’s official farm forecaster ABARES predicts that lamb exports will increase over 2017-18 on the back of increased demand from Asian importers and reduced supply from competitors such as New Zealand.

“Wool exports are also set to increase, which is largely being driven by a stronger appetite for woollen apparel in China.

“It’s certainly a positive period for South Australia’s sheep meat and wool sector, which currently accounts for almost a fifth of all farm production in the state.”

The Rural Price Index also showed that winter crop production in South Australia reached a record high in 2016-17 following a season of strong rainfall. In fact, total production of the state’s four major crops – wheat, barley, canola and oats – increased by more than three-quarters over the year, while yields were also higher across smaller winter crops such as chickpeas, field peas, lentils and lupins.

However, conditions for crop development were less favourable during autumn and winter, with below average rainfall experienced in major producing regions of the Eyre Peninsula, Yorke Peninsula and the lower north.

“While winter crop production reached a record high in 2016-17, the more challenging planting conditions in recent times are set to result in a diminished winter crop production ahead, with ABARES expecting a 43% drop in crop production in South Australia over 2017-18, compared to an anticipated 39% decrease nationwide,” Mr Panas said.

“A higher Australian dollar is also eating into the competitiveness of local producers, with the dollar now trading between 75 and 80 US cents after reaching a low of 72 US cents late last year.”

The index shows that the livestock and livestock products commodity group remains the biggest contributor to South Australia’s farm incomes, despite falling by 5% since its mid-2016 peak.

Meanwhile, the horticulture index has fallen by more than a fifth from its flood-affected peak in October last year, with prices for potatoes, onions and tomatoes moderating in recent times after surging earlier in the year due to reduced supply.

The BankSA Rural Price Index has been tracking farm prices for South Australian farmers since 2000 and is a measure of prices received for grains, livestock and horticulture. It aggregates price movements across 17 products, which make up more than 80% of the state’s farm output, and informs South Australian farmers and farm industries how local farm product prices are faring.