Sheep slaughter hasn’t lost much - if any - momentum in 2025 so far, with the biggest first five weeks of the year on record, which is why the mutton price has headed south since Christmas, despite it historically starting to lift from now through to winter. Will the throughput continue, or will the pressure of strong flock numbers and the season start to wane?
Starting with slaughter, we can see from the chart that the year has started off much higher for mutton. For two consecutive weeks in January, the sheep kill was above 200,000 head, which is unseen at this time of year. According to National Livestock Reporting Service slaughter reports, more than 860,000 sheep were processed in the first five weeks of 2025. The last time we saw figures close to this level for January was in 2020 when the first five weeks reached just shy of 795,000 head.
The latest weekly data available (week ending 31st January) did ease slightly, back to below year-ago levels, but still well above average. We can see back in 2020, sheep slaughter continued to fall from now through to spring as we entered exceptionally good seasonal conditions for most sheep-producing areas. This is also the usual seasonal pattern for mutton supply. With sheep throughput reaching much higher in 2024 than the first forecast, it is expected to decline in 2025 and, therefore, should follow the same trajectory as usual – however, with strong flock numbers, this will be dictated by the season.
In turn, the mutton price is usually on the rise for the first half of the year, but because of the supply, this hasn’t been the case. Finishing last week at 348¢/kg, it was 25% lower than the five-year average for that week (albeit nearly 70¢/kg above the doldrums of last year’s market). Looking over five years, the mutton average price climbs 15% from now through to the middle of June, while over 10 years, it increased nearly 20%. In 2020, when supply plummeted, it lifted 12% in that period.
We’ve pointed it out plenty lately, but global demand seems to be well and truly keeping up with Australian supply. We exported 19,776 tonnes of mutton in January, the largest volume ever for that particular month and 14% more than the same period the previous year. It beat the previous January record set in 2020 – the last high January slaughter year – by 6%. China was again our largest mutton market and took 38% more than its five-year average for the month, while Malaysia was the second biggest January destination, taking 63% more than last year. Mutton exports to the US actually fell year-on-year in January, and now tariff talks have begun in earnest with the new president, there could be more implications to come for all markets.
What does it mean?
Looking at the domestic situation only, mutton pricing will be dictated by where supply goes from here, and that will hinge on what sort of autumn break is in store, as well as when it arrives. Storms on the east coast are unlikely to ease the feed pressure from a long, hot summer too much in the short term, and any ewes that are dry or older age groups will be first on the chopping block if producers start to feel pinch – resulting in sheep slaughter remaining high for the short term.
Key Points
- Mutton price bucks’ historical trend and drops lower as supply remains elevated so far this year.
- Sheep slaughter sat above 200,000 for two weeks of January, unprecedented levels for that time of year.
- January Australian mutton exports reached the highest volume on record for that month
Click on figure to expand
Click on figure to expand
Data sources: Mecardo; Meat and Livestock Australia; Bendigo Bank Agribusiness
