Prices up as slaughter levels fall away

Prices for sheep and lambs are holding strong while slaughter throughput drops.

Sheep slaughter rates have dropped recently as lamb prices continue to lift. Photo by Chloe Smith.

LAMB prices have risen as slaughter fell by almost 80 per cent in Victoria this month compared with the corresponding period last year.

According to a Meat and Livestock Australia report, Victorian sheep slaughter for the week ending May 15 was just 9800 sheep, a 78 per cent drop year-on-year.

Eastern states sheep slaughter for the same week was 43,600, the lowest weekly throughput figure since June 2011.

Sheep slaughter rates have been falling in recent months, with Australian Bureau of Statistics red-meat slaughter figures for the past month showing an 18.3 per cent drop in sheep slaughter in March to 542,100 compared with February.

According to the MLA report, the severe decline in sheep slaughter levels highlights “the challenge processors will face during the winter months, at a time when lamb slaughter is also anticipated to be extremely tight”.

Rabobank animal proteins analyst Angus Gidley-Baird said Australia’s restricted sheep flock was “the main component” having an impact on domestic prices.

And while lamb prices ­traditionally increased heading into the winter period, prices had been difficult to track amid COVID-19 conditions. “The lamb market is one of the harder ones to pick,” Mr Gidley-Baird said.

“Saleyard prices are being reported … you look at the heavy trade lamb OTH at this time last year it was about 796c/kg. OTH prices are probably about 60c/kg higher than this time last year.”

In May last year, the Eastern States Trade Lamb Indicator reached 856c/kg carcass weight, a figure that was 41 per cent higher than 2018. While MLA isn’t currently publishing the ESTLI due to COVID-19 saleyard regulations, the MLA CV-19 mutton indicator has risen 8 per cent to average $167.

“Usually we see those prices start to lift about now, heading into the limited part of the slaughter period. They’ll probably lift marginally,” Mr Gidley-Baird said. “I don’t know if we’ve got a lot of capacity to go a lot higher.”

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