Another week another record high for mutton prices. At least a 55% jump in sheep yardings was not enough to meet the needs of buyers this week. The National Mutton Indicator rose 21¢ to 886¢/kg cwt. Turnoff sheep averaged $236/head at the yards this week. Trade lambs in early June last year were averaging $234/head. It’s a brave new world.
A proposed peace deal for the conflict in Iran, should it be actioned, is excellent news. The implication for the lamb and sheep market would be improved access to our Middle East customers which will be important for restoring trade volumes for lamb and mutton. Business as usual is months away, given the conflicts impact on air freight logistics and jet fuel costs. If passenger flights increase to the gulf, then volumes can ramp up pretty quickly, and expectations are for consumer demand to be strong. The Light lamb Indicator (lightweight slaughter lambs destined for a bag) was flat to 1128¢/kg cwt ($205/head on average).
The Middle East’s return to normal buying patterns will be important as sheepmeat exports continue to evolve. They’re not the biggest buyers but at current prices the supply chain wouldn’t want to leave any stone unturned. As discussed on Mecardo this week by Jamie-Lee Oldfield (read more here), Lamb and mutton exports are now trending lower than year-ago and five-year-average levels.
Whilst this is primarily driven by lower available volumes due to flock decline, sheepmeat markets are typically more price sensitive and the current strength in prices will continue to test the limit of buyer willingness to pay. For light lambs the price might not matter considering how scarce they are at the moment. On the US side of things, slaughter lamb prices in the US are now 56% higher YoY per Steiner Group and we are firmly in grilling season. With prices on both sides of the pacific pushing higher, this bodes well for status quo trade levels until consumer’s flinch.
The Eastern States Trade Lamb Indicator (ESTLI) lost 24¢ to 1197¢/kg cwt.
Next week
With maintenance windows on the way, we could see a bit of a lapse in the market. Buyers remain selective per MLA saleyard reports and no doubt given the cost of lambs of any type at the moment. Light lambs will remain rare.
Buyers were chasing weight this week in the depths of winter with heavy lambs across the saleyards attracting the most interest. Indicators were a mixed
Lamb exports remained resilient last month, but the sheep supply constraints were evident as mutton volumes fell away. China continues to bolster demand across both
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Brave new world for mutton
Next week
With maintenance windows on the way, we could see a bit of a lapse in the market. Buyers remain selective per MLA saleyard reports and no doubt given the cost of lambs of any type at the moment. Light lambs will remain rare.
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Data sources: MLA, Mecardo
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Lamb exports remained resilient last month, but the sheep supply constraints were evident as mutton volumes fell away. China continues to bolster demand across both
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
MEET THE TEAM
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.