Mutton poised to slip below 100c/kg in 15-year low for industry

Mutton prices are in free fall, diving to lows not seen since 2007, meaning some sheep now won’t be sent to market.

A surge in sheep numbers has forced mutton prices to their lowest level in more than 15 years – and for many those prices are less than 100c/kg.

An additional 2.7 million sheep and lambs have been killed year-on-year to August, with a mix of supply from saleyards and direct leaving processors spoilt for choice.

The national mutton indicator slipped to 108c/kg after Monday’s sales, in a dramatic change of fortunes for producers. This time last year, the indicator sat at 484c/kg.

Most sheep at Bendigo made just $20-$40 regardless of weight yet Merino wethers sold down to just $3 at Dubbo, NSW, and first cross ewes made as little as $8 at Corowa, NSW.

The rapid price dive has forced the National Livestock Reporting Service to change its recording parameters to include sheep selling for under $10.

This was in response to their previous system failing to pick up the cheapest sheep in their records.

Lamb has suffered a price fall but mutton prices have fallen further.

Meat and Livestock Australia market information manager Stephen Bignell said it was only a matter of time before the mutton indicator slipped below 100c/kg carcass weight, the lowest since October 2007.

“There is a surge in supply of sheep and lambs but then you can also factor in goats to the small chain usage,” Mr Bignell said.

“The supplies of mutton are up significantly but it seems processors are making a choice about whether they kill more or less mutton (or more or less lamb) on a weekly basis depending on what contracts they can get.”

But there could be an out for some producers with feed, with wool prices on the improve.

WoolProducers Australia president and Giffard sheep producer Steve Harrison said wool returns could bolster the bottom line for those who had stuck with Merinos.

Mr Harrison said the flow-on effects of poor mutton values would affect restocker breeder values, which while hard for the vendor, offered opportunities to buy.

“We need to look beyond now to three or four years time, and the chance these lower prices offer now,” Mr Harrison said.

Those with feed should consider restocking despite the low prices for mutton. Picture: Belinda Braneley

“If you have feed, you can hold or sell – if there is one big rain, the situation could turn around very quickly.”

Ballarat agent Bernie Nevins from HF Richardson said the speed of the fall in mutton prices was something he had never seen before.

“I’ve been away for three weeks and looked at a pen and what would have made $45 is now making $15,” Mr Nevins said.

“When you think about it, if a sheep is making $1/kg and it has to travel any distance and you pay yard dues, there is not a lot in it for the producers.”

Mr Nevins said the bulk of mutton was yet to come into the Ballarat yards, but if the season became drier and processors were full, “we could be in for interesting times”.

“Mutton sheep have lost 80 per cent of their value – and I am told that one major processor is saying that sheep that arrive at 22kg carcass weight or less are put down as (there is) no commercial value,” he said.

“It’s the quickest drop in prices I’ve ever seen.”