Sheep supply and demand will be an interesting equation this spring and summer. Strong flock numbers are converging with drought-induced turnoff, historically high lamb prices, and, so far, improved seasonal conditions in some sheep-producing regions. The Australian Bureau of Statistics (ABS) released second-quarter livestock figures recently, and sheep slaughter was significantly lower than for the first three months of the year. What impact will that have on mutton for the months to come?
There were 2.51 million sheep slaughtered in the March to June period in Australia, which was 9% below the same period last year, and 17% lower than the previous three months. But while it was the lowest quarterly sheep kill since the September quarter in 2023, it was still historically high, at more than 40% above both the five-year and ten-year averages. It brought the first half sheep slaughter fairly in line with last year’s numbers at 5.5 million head, with only 43,000 fewer sheep processed this January through June than the same months in 2024. Comparatively, the five-year first-half average is 3.8 million.
The latest ABS figures will be taken into account by Meat & Livestock Australia when putting together their new sheep industry projections this month, but the last iteration, released in March, had total sheep slaughter falling by 2 million head year on year in 2025. If correct, this would mean the second half slaughter would be 1.3 million head lower than the first half, a drop of 23%. The five-year average has second-half sheep slaughter at 7% above first-half slaughter, with the December quarter historically recording the highest numbers for the year.
Looking at current weekly figures from the National Livestock Reporting Service (NLRS), so far this quarter, sheep slaughter is averaging 14% lower than last year. The weekly average slaughter from NLRS figures for July and August was 46% lower than the average weekly slaughter for the first half of the year. This is not unusual, with winter historically having a much lower slaughter rate as supply eases and processing plants take scheduled slowdowns or stops. Weekly figures are still sitting about 20% above the five-year average.
What does it mean?
Mutton prices are already historically strong, and while supply could fall further in the second half of the year, strong starting flock numbers mean throughput will also remain historically high. The National Mutton Indicator has been trending lower over the past month, following the five-year average decline into spring. However, in 2020, when second-half slaughter was lower than first-half and seasonal conditions improved considerably, the mutton price bucked the trend and moved higher from mid-spring through summer. This year could follow suit if grass grows where it is needed.
Key Points
- Second quarter sheep slaughter dips by about half a million head from the first quarter but remains more than 40% above average.
- Second half slaughter to fall further if annual projections are to be met, reflecting the 2020 season.
- Mutton prices could also follow suit, trending stronger as supply constricts.
Click on figure to expand
Click on figure to expand
Data sources: Mecardo, ABS; Meat & Livestock Australia
