Prime lamb prices have regained most of their losses suffered in 2023, while mutton prices have not, and beef is somewhere in between. This article looks at goat prices to see where there are tracking, including goat volumes to help understand recent price swings.
A year ago Mecardo looked at goat prices in relation to
sheep meat (lamb and mutton) prices which were in the throes of a major
downturn as the slaughter volume of small ruminants had lifted strongly thereby
pushing sales yard prices down (read more here).
Goat prices had reverted to following the mutton price, rather than the lamb
price it had followed from 2016 through to mid-2022.
Figure 1 compares the price for a NSW saleyard trade lamb
price series and a 12.1-16 kg OTH goat price series from 2003 through to
October 2024. As the March 2022 article showed, the trade lamb price looks to
be the upper limit for goat prices in Australia (read more here). Since mid-2022 the goat price has fallen well
short of the lamb price.
Figure 2 looks at the lower bound for goat prices, which is
the mutton price (read
more here) comparing the 12.1-16 kg OTH goat price to a NSW saleyard mutton
price from 2003 onwards. After a period of outperforming the mutton price (and
tracking the lamb price) between 2016 and 2022, the goat and mutton price
series moved back into line in the spring of 2022 where they have remained. For
the past two years the two series have tracked each other very closely.
Figure 3 compares the same goat price series to a NSW trade
steer saleyard price series, from 2003 onwards. The trade steer price has
recovered about half of its fall from 2022 to the low of late 2023, clearly
outperforming the goat price recovery.
Figure 4 goes some way to explaining the relatively weak
recovery in goat prices. On a quarterly frequency, it compares the 12.1-16 kg
OTH goat price ratio to trade lamb and the eastern Australian goat slaughter
volumes (to mid-2024) from 2003 onwards. The quarterly goat volumes vary from
around 200,000 up to 700,000 animals, while the goat price ratio to lamb ranges
from a low near 20% to above 100%. The slaughter volume does not explain all of
the variation in the price basis but it gives some useful rules of thumb. The
price ratio of goat to lamb has a far better chance of being high if the
slaughter volume is low (and/or falling). When goat slaughter volumes rise to
around 500,000 per quarter or higher the basis tends to be pushed downwards
with the goat price leaning more toward the mutton price (although 2016 is an
exception to this rule).
From 2017 through to 2020 the slaughter volume of goat
trended lower, falling to a low 200,000 per quarter which helped underpin a
goat price on par with prime lamb. In 2022 as goat volumes recovered, and
trended higher, the goat price reverted very quickly to correlate with mutton.
What does it mean?
As a small player in the animal protein complex, goat prices have proved to be quite volatile, bouncing between price lamb and mutton price levels. Goat prices follow the same general trends and cycles seen in the sheep meat and beef markets (which are strongly influenced by seasonal conditions common to all) with the variation coming in the price ratio to sheep meat prices. At present goat is selling at one-third of lamb and a little over two-thirds of the mutton price, which is as low as it has been since 2003.
Key Points
- Goat prices have been strongly, and positively correlated with mutton prices for the past two years.
- Part of the reason for the switch to the lower-bound mutton price has been the recovery in goat slaughter numbers to 500,000 per quarter.
- The goat price ratios to lamb and mutton are extremely low.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: MLA, ABS, ICSMecardo
