Many readers will recall the constant references during the second half of last year around lower sheep and lamb slaughter capacity. Tight supply from 2020-2022 combined with Covid labour issues saw capacity cut and slow to recover. Good margins in the ovine processing industry have fixed capacity issues.
Strong
supply and cheap sheep and lamb in the spring encouraged ovine processors to
increase shifts and therefore capacity. Meat
and Livestock Australia (MLA) slaughter data early in December saw a significant
record achieved. Figure 1 shows East
Coast combined sheep and lamb slaughter hit a new record in the week ending the
24th of November, with 596,602 head procesed.
The new
record surpassed the 578,284 slaughted in the last week of October way back in
2014. It was significant to see
slaughter remain at extreme highs for much of December, with slaughter
remaining over 580,000 head for four straight weeks.
To get a
record in ovine slaughter you need both sheep and lamb numbers to be very
strong. Figure 1 shows lamb slaughter
peaking in December, averaging just over 427,000 head for four weeks. The 440,607 head processed in the week ending
the 24th of November was also a record slaughter level. The previous record was set in January 2016,
at 424,095 head.
For sheep
December slaughter was not quite at the records seen for lamb, but very strong
regardless. While the 160,309 head processed
in in the week ending the 15th of December was a three year highs, sheep
slaughter was stronger as recently as December 2019.
The first
full slaughter week of 2024 has shown strong slaughter capacity remains in
place. We can see that sheep and lamb
have opened the year 21% and 18% above the same time last year
respectively.
Since the
spring, the MLA slaughter data has lamb slaughter up 16% on last year, with
nearly 1.05 million head more lambs processed.
For sheep slaughter has been up 34%, with 636.8 thousand head more processed.
What does it mean?
As outlined last week in the article looking at lambs marked, the total lamb supply is likely to be similar to last year. If there have been a million more processed already, and capacity is higher, there could be a squeeze on the way. While prices have come off from highs, the first two weeks of January might have given us a glimpse where the market might find it’s level.
Key Points
- MLA weekly slaughter data shows lamb slaughter hit a record in November.
- Combined sheep and lamb slaughter also hit record highs late last year.
- The big increases in slaughter mean supply is likely to be tighter this year.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: MLA, Mecardo
