Mutton: Slaughter high for March but prices drop

Figures collected in weekly abattoir surveys show the March sheep kill was 906,000 — matching the levels recorded during the extremely dry weather five years ago.

The dry autumn in key sheep grazing areas is starting to pressure the mutton market again, with slaughter figures showing the industry just came off its biggest March production month since the drought of 2019.

Figures collected in weekly abattoir surveys by the National Livestock Reporting Service had the March sheep kill at 906,000 head, matching the levels recorded in the extremely dry period five years ago.

To put it in context, all the other autumn periods in the past decade have generally trended below 750,000 as ewe numbers to slaughter traditionally decline as the main lambing period starts.

Mutton was cheaper at Bendigo on Monday.

The latest April figures are yet to be finalised and will be distorted by the run of public holidays.

But agents said there is a push to sell-off late lambing ewes amid the late break which means many areas will battle through the colder months for paddock feed. The suggestion being the mutton market may remain under pressure of supply in coming weeks.

Elders auctioneer Jon Sutherland from Bendigo said ewes that missed during early matings and had been kept and rams put out again would be quit.

“Ewes which were being carried over for a late lambing are being sorted through and a fair few of them could end up being sold,” he said.

The mutton market at Bendigo was quoted as cheaper on Monday this week with heavy sheep the most affected. With $10 to $15 carved off heavy ewes it meant the market reverted back to a dollar-a-head range of $40 to $90 for the majority of sheep regardless of weight.

It is quite telling that the national mutton price is nearly $2/kg under the levels of 12-months ago at 244c/kg carcass weight, whereas the lamb market has recovered to now be within 10c/kg of where it was trending heading into May last year, according to NLRS data.

An additional pressure point for mutton is the distressed West Australian sheep industry, which has been in the headlines recently.

The WA Department of Primary Industries and Regional Development just released the latest quarterly figures for sheep transported from Western Australian into the eastern states.

In the first three months of this year 357,602 sheep and lambs have been trucked from the west to the east. This is the second highest first quarter volume behind 2020 when farmers in NSW and Victoria took advantage of a poor season in Western Australian to purchase West Australian sheep to rebuild flocks.

Episode 3 market analyst Matt Dalgleish crunched the DPIRD figures going back 10 years, and broke it down into this year’s monthly flow of stock from the west compared to the average of the past decade. The figures were stark with about 120,000 sheep and lambs being transported across the Nullarboor every four weeks this year, compared to the longer term trend of 35,000 a month.

Eastern processors have been among the volume buyers as mutton prices in the west collapse. The latest statistic out of Western Australia’s biggest sheep market at Katanning was an average price of 86c/kg. For a 28kg ewe this amounts to just $24. This is a discount of nearly $50 on the average rate of 260c/kg for similar sized ewes at major saleyards in the east, although much of the price difference would be absorbed in hefty transport costs to truck sheep more than 3000km.

Sheep are being purchased by producers in the east from Western Australia.

But while the mutton market still seems to be facing some headwinds, some positive signs have emerged for lamb.

There has been price bounces above 700c/kg for neat trade and heavy lambs at recent markets as the supply of quality processing stock starts to tighten heading towards winter.

The ‘windows of opportunity’ revolve around weight. At present there is reasonable numbers of heavy fed lambs coming into the system, as to go to the costs of feeding most farmers want more than $200 a head which requires size. What yardings are missing is the really neat trade weight lambs in the 22-26kg range which are properly finished with fat cover.

Illustrating this is lamb numbers by weight. In the latest price data the NLRS had 9000 lambs in its 30kg-plus lamb category, and nearly 17,000 in the heavy 26-30kg range. In contrast there were only 10,697 lambs counted in the sweet 22-24kg range, and just 6624 in the light trade range of 20-22kg.

Basically the lamb market has become top heavy, and going forward agents predict some of the hot carcass prices this winter could be for neat trade lambs.

There was glimpses of this at Bendigo on Monday with sales as high as $196 for heavy trade lambs which put them in the same dollar-a-head ballpark as some of the 30kg-plus fed lambs.