Fix crossbred wool, and the sheep industry will have taken a substantial step towards improved farmer viability, says Progressive Meats founder Craig Hickson.
He is confident the sheep industry has a future but said it is currently a single-product animal, with wool returns barely covering harvesting costs.
Acknowledging that low meat prices are hurting farmers, Hickson said the meat market is responding to the sharp price rises that occurred during covid.
Lamb should not be treated as commodity product and he sees opportunities for companies to add value by getting closer to consumers and commanding higher prices.
But that takes times and investment.
“We need to master it and have pricing more aligned to what consumers are paying and remove some of the fluctuation.”
His confidence that this will work is heightened by the popularity and relative scarcity of lamb, how easy it is to cook and, especially in the case of French racks, the restaurant presentation opportunities.
Hickson calculated that between 1985 and 2024 there was an 11-fold increase in meat income generated per ewe, thanks to improved lambing, higher lamb weights and improved prices.
He acknowledges that inflation has eroded the impact of those returns, but it shows prices have been improving.
Silver Fern Farms chief supply manager Jarrod Stewart is not expecting prices to improve any time soon.
“Unfortunately, we have a few big levers working against us in the markets at the moment, with depressed consumer confidence and increased production out of Australia impacting pricing.”
Stewart said sheepmeat will continue to be a critical part of SFF’s business and he is optimistic about longer term prospects through its promotional programmes and its broader Nature Positive branding focus, which is backed by industry assurance standards.
“Our farming system is unique and we create some truly premium products.
“In the last year, we’ve increased programme premiums for lamb supply, and we’ve expanded our Net Carbon Zero range to include lamb.”
Stewart said there is increasing evidence that focus is resonating with customers.
“While there’s more work and investment in our markets needed, we do feel confident in our direction of travel.”
He said industry collaboration is addressing collective challenges facing the sheepmeat sector, which includes working with Wool Impact to improve the viability of sheep farming.
Alliance Group chief executive Willie Wiese told the Farmers Weekly earlier this month that ways have to be found to return more value to farmers.
He said lamb will benefit from growing demand for protein and, like other companies, Alliance is looking to find innovative higher priced products from lower value, or fifth quarter, items.
He said lamb prices would be less volatile if it could be positioned as a niche product, something Alliance is doing.