Victoria is facing a dire lamb shortage this Australia Day as meat companies warn of crippling shortages leaving farmers holding onto lambs destined for slaughter.
Hundreds of meat workers are in isolation and unable to work as the Omicron variant triggers a statewide staff shortage, preventing more than 60 per cent of the state's lamb supply from hitting supermarket shelves.
"You've got a worker shortage of 30-50pc at southern abattoirs and the lamb slaughter numbers demonstrate that reduced capacity," Thomas Elder Markets analyst Matt Dalgleish said.
In the opening weeks of January, the average weekly slaughter for Victoria was less than 120,000 head, marking a fall of 17pc on last year and nearly 40pc under the five-year average trend.
"Last year Victoria was 25pc below the five-year trend, which reflects the tight supply, but this year we are 37pc, attributable to the workforce issues that we have experienced this month," Mr Dalgleish said.
The impact has been a dramatic handbrake on the volume of lambs hitting saleyards, with just 8800 lambs and 2900 sheep sold at Bendigo on Monday as producers hold off from selling on the COVID-distorted market.
Despite the low supply, prices eased again with about three processors absent.
Saleyard throughput this month has been about 60pc lower than normal.
For Victoria, 42,914 lambs were sold in the opening week, compared to 97,986 the same week last year.
The short-term impact has been producers holding back stock until processors have kill space to process them.
"Agents are advising to hold lambs ready for abattoirs and not flood the market," Mr Dalgleish said.
"Heavy lambs held their level which suggests people are holding back lamb destined for the processor.
"The season has been exceptionally good for pasture so of all the years you can hold on for longer, this is one you can."
The skyrocketing lamb prices coupled with pandemic-imposed restrictions on abattoirs and worker shortages coincides with Meat & Livestock Australia's annual summer ad for Australian lamb - a satirical look at the country's global isolation during the pandemic.
MLA reported the 2021 lamb campaign increased sales by 16.8pc, but Mr Dalgleish fears the ramifications of the current shortage would lead to a backlog of heavy lambs and skyrocketing retail prices that would deter people from purchasing lamb.
"Lamb is increasingly more expensive and we have seen annual consumption of lamb per capita down below 6 kilograms a year, and that is set to drop even further," he said