Market Morsel
The release of the Australian Bureau of Stats (ABS) animals massacre information recently permits us to sign in on the status of the flock cycle and step if we are formally in liquidation stage or still restoring. Historically, the limit level that signifies the relocation from reconstruct to liquidation (or vice versa) is a sheep turnoff ratio (STR) of 14%. Above 14% and the Australia sheep flock remains in a liquidation stage, listed below 14% and the flock is restoring.
The September 2023 STR has actually been available in at 12.6%, up from 11.9% in June 2023. So we are still 1.4% far from formally moving into flock liquidation stage, however the pattern towards liquidation for the STR is plainly obvious. As a yearly average the STR for 2023 sits at 11.3% which, based upon the historical scatter plot in between yearly flock modification to yearly typical STR, recommends and increase to the flock is still most likely for 2023 of around 4%. Existing MLA forecasts (from their July 2023 report) have the flock increasing by 3.6% in 2023 which appears about right, provided the present STR levels.