Mutton prices have seen a further downturn, with significant price reductions recorded last week.
The reasons behind the sharp drop in sheep prices, which have now reached their lowest levels in over a decade, revolve around several factors.
The problems that currently affect the industry are labour-force challenges that impact processing capacity and the surplus of sheep in the market.
When it comes to profitability, processors are finding their profits primarily tied to the processing of lambs, as mutton margins have significantly tightened.
An example of this price volatility was seen at Wagga Wagga, NSW, on Thursday, where the gains made in the previous sale were entirely erased, and rates plummeted by more than half.
The most pronounced impact was felt by the big Merino wethers in the market, as their prices tumbled by $63 a head after reaching a high of $144.
The mutton price is currently struggling to maintain a level of 100 cents a kilogram carcase weight, and a significant portion of sheep sold in the past week fetched prices well below the 100c/kg mark.
This decline in mutton values appears particularly severe, especially when considering the robust profit margins observed for processors in the preceding week at Wagga Wagga.
From the perspective of farmers, the market has become exceptionally volatile, posing challenges and uncertainties in the mutton industry.
As of Wednesday, the mutton indicator was sitting at 102.75c/kg, down 36.95c/kg week-on-week.
This indicator is almost 375c/kg down on the same time a year ago.
A resurgence in market was evident at Bendigo on Monday as lamb numbers dwindled, injecting fresh vitality into the sale.
For the first time in months, the lamb market displayed a notable sense of urgency, with buyers driving prices up by $5-$10, and in some instances, trade lambs witnessed big spikes of up to $15 in value.
The heaviest lambs, boasting a substantial 31kg, fetched impressive prices of up to $165.
Lambs within the 24-26kg range were traded for prices ranging from $138-$148, while those in the 22-24kg bracket commanded prices between $110-$138.
Store lambs returning to the paddock, bearing both weight and frame, were able to secure prices starting at $100.
Despite a decline in sheep supply by almost a third, the market struggled to find solid footing.
Most sheep sales fluctuated in the range of $5-$40, translating to an average of 50-120c/kg.
The Ballarat lamb market on Tuesday followed suit with other sales with rates $8-$10 dearer.
The biggest gains were across trade lambs which averaged 507c/kg.
- Leann Dax is an NLRS market reporter.
