The mutton market has held fairly steady throughout the autumn, but it hasn’t experienced the same rebound as lamb in recent weeks. The national mutton indicator currently sits at 270c/kg, and last week’s rolling average was about 45% lower year-on-year. With the first frost for many sheep producers just around the corner, signifying the winter slow-down for pasture growth, is there much upside in sight for mutton?
Last week’s rolling average price of
236c/kg was 50% below the 10-year average for that week, and 57% below the five-year
average. The average mutton price for the 2023-24 year so far is 211c/kg, which
is just less than half of what it made in the 2022-23 year. We must go back
over a decade (to 2012-13) to find an annual average price below what it is
currently tracking for mutton. If we look at this comparatively to lamb, mutton
is 150c/kg lower year-on-year; while the heavy lamb price is just 14c/kg lower,
and trade and restocker lambs have risen.
Of course, it has been well documented that
supply has been headed in the other direction, with East Coast sheep slaughter
trending well above the five and 10-year averages. So far this year, weekly
sheep slaughter is averaging 18% higher than for the same period last year, and
44% above that period in 2022. This is where it doesn’t stray away from lamb,
however, with lamb slaughter averaging about 20% higher so far in 2024.
On the demand side, mutton export volumes
climbed back above year-ago levels in April, up 20% for the month, which
brought the year-to-date volume 17% higher year-on-year. Much like lamb, this
has been driven by demand from the US, with the amount of Australian lamb
headed there 158% higher for April, and 64% higher for the year so far compared
to the same period in 2023. Our major market China lost ground in April and is
back 10% for the year-to-date, but volumes headed there have risen 23% for the
12 months ending April.
Restockers are always part of the demand
equation, and while Meat and Livestock Australia reported that it was them, along
with lotfeeders, that helped lamb prices firm up last week, the National
Livestock Reporting Service shows restockers purchased less than 100 of the
37,500 head eligible for the current Mutton indicator. At Wagga Wagga last week
trade mutton demand was hit and miss, while scanned-in lamb Merino ewes had the
biggest offering of all sheep categories on AuctionsPlus last week (including
lambs), and prices held firm but clearance was only 27%.
What does it mean?
With seemingly little appetite for restockers to boost numbers from outside their own flocks, they are unlikely to offer much in the way of more competition for mutton, especially if significant widespread rainfall doesn’t occur before winter. And while slaughter demand appears to be strong, ample supply means processors, who aren’t coming up against much competition, are unlikely to have to offer more in the short term. .
Key Points
- Mutton price still lacklustre at 10-year lows, lagging behind lamb.
- Mutton slaughter increased in line with lamb, but still higher than the long-term average.
- Restocker interest is subdued as many areas look for more autumn rain.
Click on figure to expand
Click on figure to expand
Data sources: Meat and Livestock Australia; AuctionsPlus, Mecardo
