Mutton prices rise as flock rebuild continues

Sheep meat prices have surged again — one week after Argentina announced its beef export ban. Industry experts explain why.

Deniliquin sheep sale, January 2021. PICTURE: Jenny Kelly

Mutton prices have risen fast during the past week as demand grows due to flock rebuilding and global animal protein shortages.

The benchmark price, the eastern states mutton indicator reached 686c/kg on Monday, an impressive lift of 27c/kg on last week and 40c/kg on last month.

The higher sheep prices also follow announcements that Argentina, a major beef exporter to China, would impose a 30-day ban on the export of beef.

There is expectation in the industry for some impact on the sheep meat market as an alternative protein.

However, mutton prices are still 30c/kg lower than the same time last year, when the indicator was at 716.5c/kg.

Mecardo market analyst Angus Brown said the price lift in sheep market was “interesting timing” off the back of the Argentina export ban last week.

“With what’s going on in the international beef market with Argentina, we may get some data in the future that China might be turning to mutton. It’s interesting timing with the push in demand for mutton,” Mr Brown said.

However, he gave most credit to the tightening supply of sheep at the moment due to the push to rebuild the national flock.

According to Meat and Livestock Australia data, national flock numbers were projected to reach 67.3 million head by June 30, a 5.2 per cent increase on last year.

“It’s just that time of year when people aren’t selling sheep, but demand is still strong and the processors have got to fill their kill space,” he said.

Rabobank analyst Angus Gidley-Baird said the improved seasonal conditions meant people were holding on to sheep which had indicated limited supply, resulting in prices that were “quite strong”.

At the Bendigo prime sheep sale on Monday crossbred ewes sold for more than $290, or 700c/kg.

Rodwells Bendigo livestock manager Nick Byrne said heavy mutton was $20 to $30 dearer last week and lifted again this week, to be $10 to $30 dearer.

“There would be sheep that would be $50 dearer today than what they would have been three weeks ago,” he said.

But Mr Byrne said he was sceptical about the longevity of the elevated prices.

According to Mr Byrne the heavy end of the mutton was dearer thanks to two deep-pocketed exporters dominating the bidding.

“They were extraordinary rates on offer, but whether that’s here for an extended period, I’d be very dubious,” he said.

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