Latest data signals bright lamb outlook

EYE ON THE MARKET: Buyers, livestock agents and vendors are pictured at the Wagga sheep and lamb sale.

EYE ON THE MARKET: Buyers, livestock agents and vendors are pictured at the Wagga sheep and lamb sale.

NEW data from Meat and Livestock Australia (MLA) paints a bright picture for the sheep and lamb industry.

Factors including an intent to keep breeding ewes combined with a strong wool market and lower grain prices have all been positive influences for the sector. 

MLA STATISTICS: 

  • There are 2.7 million fewer sheep and lambs to be processed in 2017 compared to last year.
  • The 2017 lamb slaughter forecasts revised down by 500,000 head to 21.5 million head.
  • Mutton slaughter is set to be second lowest on record – a 1.2 million head (17 per cent) year-on-year drop to 5.8 million.

MLA’s manager of market information services, Ben Thomas, said the market was being influenced by a combination of factors, including extremely strong producer intent to retain ewes for flock rebuilding, the current strength of the wool market and low grain prices.

“Lamb slaughter is expected to contract further this year, revised down a further 500,000 head from original predictions to 21.5 million head for 2017 and down 1.5 million head, or 7%, on the 2016 record,” Mr Thomas said.

“In terms of availability throughout the year, on the ground reports suggest a reasonably strong supply through to the end of April, before numbers will become tight until the new spring flush. “Lamb production is expected to fall 6% year-on-year in 2017 to 481,600 tonnes carcase weight (cwt), before rebounding back above the 500,000 tonnes mark in 2019. “Similar to lamb slaughter, mutton processing is also expected to contract further year-on-year, with a 1.2 million head, or 17%, year-on-year drop to 5.8 million head for 2017.

“The reduced slaughter numbers has led to a downward revision of export forecasts, with an expected 7% drop in lamb shipments for 2017, to 225,000 tonnes shipped weight (swt) – 5,000 tonnes swt lower than forecast.

“The US, China and the Middle East are expected to remain the major export markets.

“Mutton exports have also been revised, with 102,000 tonnes swt expected to leave Australia, down 18% on last year.” Mr Thomas said with 2.7 million less sheep and lambs set to be processed year-on year, the short supply will keep prices buoyant for the remainder of 2017.

“The current combination of factors in the market will lead prices to average alongside, or even exceed, the previous records,” Mr Thomas said.

“Despite the buoyant market, there is a concern around the sustainability of the current price levels further up the supply chain, with some recent temporary closures of processing facilities,” he said. 

  • Sheep and lamb markets will resume at Wagga on April 20 after the Easter recess. 

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