Optimism as sheep, lamb prices improve

While sheep prices have turned around, climate and market conditions has seen sentiment fluctuate across the country.

There has been a turnaround in lamb and sheep prices, as supply and demand factors kick in.

Lamb prices have gone back above the 800c/kg ceiling and look likely to stay – at least for a while.

The national heavy lamb indicator was tracking at 839c/kg carcass weight, 66c/kg higher than a week ago and 287c/kg higher than this time last year and the trade lamb indicator hit 832c/kg, an increase of 59c/kg in a week and an increase of 265c/kg on this time last year.

Nutrien Bendigo livestock agent Nick Byrne said the rising prices were due to “a simple supply and demand situation”.

And this short supply could continue, with new-season lambs expected to be later than normal, and Meat and Livestock Australia forecasting the sheep flock will decline this year.

According to MLA’s Sheep Industry Projections, released in February and due to be reevaluated soon, the Australian sheep flock is set to decrease 2.9 per cent to 76,500,000 in 2024.

MLA also projected lamb slaughter to reach record levels two years in a row, climbing to 23.7 million in 2024, while sheep slaughter was also expected to remain high, driven by a large and productive breeding flock.

MLA manager of market information Stephen Bignell said after 2024, the flock is expected to stabilise and remain above the 10-year average.

Meanwhile, slaughter and production are projected to peak in 2024, causing record supply of Australian sheepmeat into the global market.

Lamb production is set to break a new record in 2024, beating the previous year’s record.

MLA is forecasting lamb production will reach 621,000 tonnes in 2024, a 9 per cent or 54,000 tonne increase compared to 2023. If this eventuates it will be 21.3 per cent or 109,359 tonnes above the 10-year average.

And it seems there is good global appetite for Australian sheepmeat, with sheepmeat exports reaching the highest on record for the 2023-24 financial year.

Sheepmeat exports reached 587,262 tonnes in 2023-24 – 24 per cent higher than the previous financial year.

The biggest increase was from the Middle East and North Africa region, where exports rose 76 per cent to 125,088 tonnes.

While prices have currently turned around, Australian sheep producers’ confidence has been impacted by climate and market conditions.

That’s according to the latest Sheep Producer Intentions Survey, released by MLA and AWI last week.

For the survey feedback was sought from producers during the period May 1 to June 3, 2024.

It found sentiment has improved among sheep producers since the last survey in October 2023, with sentiment rising by 46 points to a nett sentiment score of +4, with this result attributable to improved commodity prices over the summer.

Wool producers recorded a more pessimistic opinion of the industry compared to the last survey, down 9 points to a nett sentiment of -24. This was due to producers considering potentially worsening weather conditions in Victoria, Tasmania and South Australia.

Mr Bignell said price volatility, inconsistent weather and various political discussions have had a varied impact on producer sentiment across the country.

“Producers in Queensland (+33), NSW (+21) and Victoria (+12) had positive outlooks for the industry, while producers in South Australia (-1), Tasmania (-5) and Western Australia (-64) had negative outlooks,” Mr Bignell said.

He said during the survey period the Australian Government announced that it would introduce legislation to phase out the exporting of live sheep by sea by 2028.

“This has had an impact on sentiment not only in Western Australia, but in other states as well.”