The Meat and Livestock Australia (MLA) and Australian Wool Innovation (AWI) Sheep Producer Intentions Survey (SPIS) released last week covered plenty of ground. Still, it’s the lambs marked number that is of most interest to us, and for markets.
The October SPIS survey traditionally gives us the best indication of how
many lambs there are out there. There
are not many lambs born after October, so the number that have been marked for
the year to October will give us a good idea of how supply might track in the
New Year.
Figure 1 shows lambs marked up 3% on the October survey number from
2023. At just over 25 million head, the
number of lambs marked is up 846,786 head on last year. There were 5% more ewes joined to produce
these lambs, with marking rates falling overall, from 97 to 96%.
Figure 2 shows it was Merino marking rates that dragged the total number
down. Merino marking rates fell from 85
to 81%, leading to a 2% decline in lambs marked, despite a 2% increase in ewes
joined.
All other sheep, which are largely made up of prime lamb and first cross ewes,
achieved a marking rate of 106.2%, up marginally on the 105.6% achieved last
year. With a 6% increase in ewes joined
to produce ‘other’ lambs, the survey suggests just over 1 million more lambs
were produced this year. ‘Other’ lambs
continue to drive the increase in production.
With 1 million more lambs marked, there will likely have to be more lambs
slaughtered this year. Since the start of July East Coast lamb slaughter has
been down on last year, and we know lambs have been growing slowly this year.
Lamb slaughter for the first half of 2024 was extremely high, but we
might see even stronger levels in 2025 unless more ewe lambs are slated to be
retained for breeding. This means we
might see some pressure come on to markets when the extra lambs are finished
and ready for the processors.
What does it mean?
With the poor autumn and winter in some key lamb-producing areas, we thought lambs marked might be down this year. The survey relies on a broad geographic spread to get accurate data, and as such it could be a little skewed if fewer growers from impacted regions fill out the survey.
If supply is stronger in the New Year, prices might ease from January. With the ramping up in slaughter capacity, and export demand still strong, we don’t expect prices to fall to last year’s levels (Figure 3), but around 700-750¢/kg is not out of the question.
Key Points
- The October Sheep Producer Intentions Survey reports a million more lambs were marked this year.
- More prime lambs were marked, and fewer merinos.
- Increased supply could pressure prices lower in the new year.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: MLA,AWI, Mecardo
