Mutton slaughter surge equals producer price gain

Sheep,Grazing.,Tablelands,Near,Oberon.,New,South,Wales.,Australia.

Both yardings and slaughter for sheep and lamb are on their way back up after the usual mid-winter processor slowdowns come to an end, and producers start to look at what they want to be carrying come the spring, especially as predictions of a dryer season continue. Unfortunately, increased supply has only meant one thing across nearly all categories this week, lower prices.

Mutton has experienced the most significant decline, losing 75c/kg for the week to close at 258c/kg. Unsurprisingly the National Mutton Indicator also had the highest throughput of all the main indicators, with more than 44,000 head contributing to the NMI this week, and Merinos making up more than 30,000 of those. A third of NMI sheep went through the Wagga Wagga yards, where the price averaged 2¢/kg below the indicator, while the next largest yarding of sheep, Forbes, averaged about 5¢/kg more.

According to MLA, national sheep slaughter was up 120% week-on-week to Wednesday and is now 63% higher for the year. NSW had the biggest jump in sheep slaughter, up 146% for the week. The lamb kill, while still above year-ago levels, actually dropped by more than 13,000 head, as sheep seem to remain the priority for processors. Both sheep and lamb yardings were lower this week, with the month of July sitting well below the average for yardings, reflecting producers’ current inclination to sell direct where pricing is less volatile.

Lamb prices did not fare much better this week, with the Eastern States Trade Lamb Indicator falling 42¢/kg since last Friday, to land at just shy of 473¢/kg. Again, Wagga and Forbes had the biggest contributions at 27 and 25% respectively, and again Forbes operated at a premium to the indicator, while Wagga was below. Victoria made up some of its losses from last week, operating well above the ESTLI, while Dubbo and Yass in NSW were well below.

All other lamb categories fell, with restockers hit the hardest losing 63¢/kg for the week, and now 224¢/kg down from the same time last year. Merino lambs fell nearly 60¢/kg. Heavy lambs weren’t left out, but at just 30¢/kg cheaper for the week were the best performing, closing at 479¢/kg.

Next week

After a week like this, we often see some price relief in the market as producers pull back from selling if possible and give some supply relief. We are also getting close to new season lambs hitting the market, and if the quality is there this year it should give processors some incentive to start to look away from sheep and towards them, and at an improved price point from the current trade product. Nothing is indicating any significant change to the market in the short term however with the consumer demand outlook unfavourable.

Have any questions or comments?

We love to hear from you!

Click on graph to expand

Click on graph to expand

Data sources: MLA, Mecardo

Make decisions with confidence- ask about our board packs, bespoke forecasting and risk management services

Have any questions or comments?

We love to hear from you!

Want market insights delivered straight to your inbox?

Sign up to the mailing list to get regular updates to new analysis and market outlooks

Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published

Commodity conversations podcast cover image, a illustration of a sheep standing on a cow's back with grain either side
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.

Photo of a farmer surrounded by Merino sheep in dusty yards
Research: Analysis of the Australian sheep flock

In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making. 

Image of harvested grain pouring into a chaser bin
SERVICES AND CAPABILITIES STATEMENT BROCHURE

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.