Amongst the doom and gloom of a fast-failing spring for many farmers, the lamb industry has emerged offering hope and profits.
With forward contracts offering security of price, a low Australian dollar and a drop in grain prices, the next six months look good for lamb.
Nutritional consultant and South Australian producer San Jolly said the ducks were finally lining up for an industry hamstrung by circumstance in recent years.
"We have some forward contracts, Halleluya!" he said
"I believe we have a working industry now because I see barley dropping to about $260 a tonne and there are plenty of failed crops for fodder as well.
"Feedlotting may be an option for farmers this year, unlike last year and recent budgets suggest there could be an $8-$16 gross margin for fast growing feeding lambs this summer."
Prices for lamb have held up relatively well in recent weeks with prices commonly around $3.50 to $3.70 in the face of the usual spring flush.
The bonus is that with current trading conditions, options are now available to keep lambs on, thus maintaining the supply of lamb into the New Year.
Late last month Tatiara Meat Company broke the mould by releasing forward contracts for 20-30 kilogram carcase lamb, delivered in November at $3.40/kg.
Ms Jolly said it was a great step for the industry, one she hopes will be followed.
"I am hopeful we could see some $4.00 contracts for December-January which would kick things along further," she said.
Sadly spring rain has been all but non-existent across much of southern Australia, with mixed seasonal conditions in every State, but rain is desperately needed for most southern areas and crops have been cut for fodder for many weeks now in more northern production areas across the south of the country.
Grazing crops are likely to deliver the best profit result and growth rates have to be at least 300 grams per day to be worth it, she warned.
"Keep in mind feedlot profitability is very sensitive to rate of growth when price is below $4/kg dressed weight," Ms Jolly said.
Australia's largest sheepmeat processor, Roger Fletcher agreed the lamb industry had a rosy outlook, but would also not be drawn as to whether lamb could be at $4 a kilogram into the New Year.
"Lamb is in good shape from a number of points, there will be grain around at affordable prices for finishers, the lower Australian dollar is helping trade as export orders are holding up well, so the exchange rate is cushioning the blow from the global slowdown," Mr Fletcher said.
"Something else though, New Zealand production of lamb is well down and there will be opportunities from that because the kiwis will be aiming to fill that European quota but won’t be able to fill all their markets."
Mr Fletcher also added a supply shortage of mutton would present lamb with other market opportunities.
"It's a pretty good picture for lamb right now. A good, balanced industry."
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