Experts, producers with a spring in their step for lamb’s future
Australian lamb prices are sitting above 1100c/kg, with upcoming spring conditions to determine the fate of this year's market.
Australia’s sheep and lamb market projections are wholly dependent on how spring will play out for the southern regions, experts say.
Victoria’s final month of winter has shown sporadic rain across its drier regions, with rain totalling anywhere between 10-300mm across the state.
It meant boosted confidence for graziers and processors alike as the national trade lamb indicator remains above 1100c/kg and mutton holds just above 700c/kg. But sheep meat industries would keep an eye on weather forecasts headed into spring, as new-season lambs hit the market and feed could dictate the market’s major drivers.
StoneX Australian livestock and commodities manager Ripley Atkinson said producers would be eyeing rain totals and feed availability to decide on retaining stock.
“If producers are getting seasonal conditions that are conducive to retaining numbers that will push up demand and reduce supply which will support pricing more broadly,” he said.
“The other side to that story is profitability in the processing side of the supply chain.”
He said producers were aware of the market performance and would strive to present fresh, quality lambs. Mr Atkinson said a potential reduction in demand from processors to cost-save could have an impact on price, as they potentially slow down kill chains or cut shifts.
Mr Atkinson said there would be fewer sheep in the short-term, but the amount of lambs coming forward could surprise people. He said lamb prices hadn’t helped a global market, with consumers switching to cheaper proteins.
“Local price and the effects of that and what it can do to lamb’s position in retail markets around the world, that’s potentially a risk,” Mr Atkinson said.
“Domestically, the same thing happens, which is not good.”
He believed producers and the southern sheep flock could recover faster than expected, with graziers focused on a strong breeding ewe base.
Mecardo market analyst Angus Brown expected a tighter supply this year after last year’s records.
“Export numbers still seem to be quite strong despite the high prices, the US and China are still very strong,” he said.
“That demand is still there for lamb, we’ve got through this period of extreme prices, it’s come off a bit and processors cut their kills.”
He said Australia’s lamb market strengths would be in the heavier, fresher lambs and restocker end of the market.
“It will be about trying to find the balance between what’s available and what they can afford to pay,” he said.
Gemini Prime Lamb Sires stud principal Craig Mitchell believed market prices would be “considerably better” this year. The stud breeds about 800 ewes annually and turns off about 1200 lambs, with 300 sale rams.
“Part of the unknown is the supply side, I suspect there’s less lambs out there than what the numbers indicate,” he said.
“Lambing percentages are probably back and ewe numbers are definitely back, that will drive higher prices.”
Mr Mitchell believed sheep and red meat industries would be “very positive” for the next few years due to early market indications.
