Lamb and mutton prices will go one way - up!

Lamb and mutton prices heading for new record in 2019-20 says ABARES

News
THEY LOVE OUR LAMB: Demand from countries like China will see a larger slice of Australian lamb and mutton heading overseas this financial year.

THEY LOVE OUR LAMB: Demand from countries like China will see a larger slice of Australian lamb and mutton heading overseas this financial year.

Aa

The national commodity forecaster, ABARES, is predicting another big jump in lamb and mutton prices this financial year.

Aa

Saleyard lamb and mutton prices are tipped to set new records in 2019-20 on the back of reduced turn-off in eastern Australia and growing overseas appetite for our premium sheepmeat.

The national commodities forecaster, ABARES, is tipping a 12 per cent lift in average lamb prices to 810 cents a kilogram carcase weight and a 22pc hike in sheep prices to 550c.

Meanwhile, lamb prices this week have been relatively steady while mutton prices have lost a little ground.

The Eastern States Trade Lamb Indicator finished Tuesday on 811 cents a kg carcase weight, up 15c on week-ago levels while the mutton indicator dropped to 521c, a 39c loss for the week.

Lamb slaughterings last week reached 328,438, up one per cent on levels the previous week, with Victoria topping the list at 175,933 followed by NSW on 101,696.

The sheep slaughter was 127,456, up 1pc, with Victoria again leading the field with 53,490 followed by NSW 52,480.

Looking at the market in the longer term, ABARES said prices throughout 2018-19 rose strongly because of the sustained high sell-off of breeding sheep due mainly to drought which reduced the number of lambs going through saleyards.

The lamb supply outlook will worsen in 2019-20 while strong export demand will add more pressure on prices, ABARES said in its September quarter commodities update.

Falling mutton production coupled with keen international demand will also lift saleyard sheep values.

ABARES said demand from China, the world's largest consumer, importer and producer of sheepmeat, had significantly increased Australian saleyard prices.

However, the growth in exports had been driven by mutton purchases rather than lamb.

ABARES said falling mutton production would make sheepmeat exports more expensive and uncertainty surrounded China's willingness to pay the higher prices.

Given better seasonal conditions producers would begin rebuilding flock numbers which are now estimated at 66.4 million, the lowest level since 1904-05.

The shrinking breeding flock will make life difficult for restockers when seasonal conditions become more favourable.

Lamb slaughterings are tipped to drop by 7pc in 2019-20 to 20.5 million and sheep by 24pc to 7.4 million.

This will slash sheepmeat export volumes by 18pc to 401,000 tonnes and reduce export returns by 10pc to $3.5 billion.

ABARES expected the proportion of sheepmeat that is exported to continue to increase with high demand in all of Australia's major export markets which will force domestic consumers to switch to alternative protein sources.

NZ sheep meat production was was forecast to continue to fall which will add even more pressure on import prices.

Live sheep exports were predicted to drop by 5pc in 2019-20 to 875,000 head.

Meanwhile, the Rural Bank in its latest Australian Agricultural Trade report estimated Australian sheepmeat exports reached a record high of $4.3 billion in 2018-19.

It said lamb export volumes lifted by 4.6 per cent last financial year despite a 5.8pc decline in production as a result of drought and a smaller flock. Lamb exports as a proportion of production increase to 58.5pc, up from 52.7pc the previous year.

Red hot competition also resulted in an 11.5pc increase in the average price of lamb exports.

Mutton export volumes rose by 11.5pc as destocking led to higher production.

With exports accounting for 85pc of mutton production, the additional supply flowed into international markets.

The average export price of mutton increased 8.7pc.

Live sheep exports declined by 53.2pc in 2018-19 to the lowest point since the 1960s and at $121.1 million, accounted for only 2.8pc of Australia's sheep industry exports.

Western Australia was the source of 96.8pc of live sheep exports and the trade remains an important part of the state's sheep industry, accounting for 17.1pc of sheep industry exports.

The story Lamb and mutton prices will go one way - up! first appeared on Farm Online.

Aa

From the front page

Sponsored by