The report, Australian Lamb: Financial performance of slaughter lamb farms, 2005-06 to 2007-08, was released today by ABARE’s acting Executive Director, Karen Schneider.

“In 2006-07, production of slaughter lambs was adversely affected by drought and reduced irrigation water availability,” Ms Schneider said.

With farm output constrained and costs rising, slaughter lamb producers of all scales recorded their largest farm business losses, in real terms, since ABARE started collecting detailed information on slaughter lamb production.

“Improved seasonal conditions in 2007-08 are projected to result in many producers realising a significant improvement in farm cash income, as receipts rebound and costs fall,” Ms Schneider said.

“In recent years the slaughter lamb industry has undergone a period of significant new investments in capital, particularly land, plant and machinery. This, combined with high equity levels, will enable most producers to finance their recovery and expansion,” Ms Schneider added.

However, Ms Schneider cautioned that many producers’ high equity levels have been driven by a steady increase in land values in recent years.