’Ripple effect” sees Warwick prices drop almost half
PREMIUM sheep sales dreams have been shattered this week as Victorian coronavirus restrictions finally hit the Warwick saleyards.
McDougall and Sons agent Ross Ellis said a 45 per-cent drop in sale prices from a fortnight ago were a "worry" for producers, especially those trying to buy their way back into business.
With Victorian Premier Daniel Andrews announcing a 66 per cent reduction in Victoria's red meat operations, the Southern outbreak was the head of a "three pronged sword" affecting prices at the moment, according to Mr Ellis.
"COVID-19 has raised a fear in a lot of the processing plants," he said.
"They don't want to be fully operational if they're going to be closed down."
Mr Ellis said while Warwick sales were mostly dependant on smaller butchers and rural operators, it would be naive to think everything didn't have a "ripple effect in the meat industry".
"Two of the major plants in Victoria were in a COVID-19 risk area, so they had to stop and sanitise before they opened, and now they're not back at full capacity," he said.
"And with the high levels of unemployment, people haven't got the money to buy the product, but it still has to be turned over and so they drop the price to move the product."
Other factors included the new lamb season down south and the winter maintenance of many bigger processing plants.
It meant for those buyers finally confident enough to restock, they could be looking at a rough road ahead, despite the fact their competition was keeping the market "from collapsing".
"I had some light lambs going from $144 and the pen next door had processed lambs, 25 kgs dressed going for $144," Mr Ellis said.
"You're seeing now people paying high prices at light end doing their sums and they'll be lucky to make any money if market stays where it is come turnover time."