All figures are looking up in the latest Meat and Livestock Australia sheep industry projections, released last week - except for prices that is. However, given historically strong flock numbers and record high slaughter, the price is expected to hold up to the usual spring downward pressure reasonably well.
Despite poor seasonal conditions across
much of far southern Australia, the national sheep flock has in fact lifted
slightly compared to this time last year, hitting 79.1 million head, its
highest point in 17 years according to MLA. This is above the 10-year average
of 70.3 million, and while the forecast numbers will start to dip lower from
here on, falling 6% by 2026 to 74 million, the flock will still be above that
average figure.
This flock growth has had to have come from
increased ewe retention and better breeding outcomes, as slaughter figures have
also been revised higher than first thought for 2024. Lamb slaughter reached a
record 25 million head last year, which was a lift of 16%, and is now forecast
to hit 27.7 million head in 2024, a further increase of 11%. Both last year’s
and this year’s lamb slaughter have come in higher this time around than MLA’s
February forecast, which had it lifting just 5% year-on-year. The projections
have lamb slaughter falling year-on-year in 2025 and 2026, but still remaining
above last year’s record level.
Following the sheep flock trend, the forecast
sheep slaughter for 2024 is now lower than the previous outlook, at 10 million
head, however, has been lifted substantially for the next two years, and is set
to be 13% higher in 2026 than in 2023. This is compared to the February
forecast when that figure was actually 18% lower for the same period. Mutton
exports are still expected to lift slightly this year, despite lower predicted
slaughter, and then continue to rise out to 2026. Despite lower consumer
confidence globally, less supply out of New Zealand going forward will support
sheepmeat exports out of Australia.
With the future banning of live sheep
exports having been legislated since the last industry outlook, those figures
have been revised downwards for this year and next, however are expected to be
stronger in 2026, with the forecast 700,000 head being 8% more than were sent
last year and 50,000 head more than was predicted for that year in February.
MLA’s aggregate analyst price estimate has
the National Trade Lamb Indicator easing 3% to 782¢/kg carcase weight by the
end of the year, and the National Heavy Lamb Indicator falling 7% to 756¢/kg.
Comparatively, the 10-year average for both heavy and trade lambs dropped about
2% in that period.
What does it mean?
The revival in the lamb market is even more positive on the back of stronger-than-expected flock and slaughter numbers, and pairing this with the historically high export figures despite the global economy not being at its best is all positive for the longer-term price outlook as numbers start to contract. While the short-term spring outcome for producers will still be dictated primarily by the weather, longer-term MLA’s figures have everything headed in the right direction for producers.
Key Points
- Sheep flock forecasts have lifted for this year and next, to be 79.1 million head in 2024.
- Slaughter numbers have also been revised higher after a record first half of 2024, predicted to be 8% higher year-on-year.
- MLA Analyst aggregates peg both trade and heavy lambs to decline between now and the end of the year.
Click on figure to expand
Click on figure to expand
Data sources: MLA, Mecardo
