Processors switch to mutton as price widens by 542c/kg

Victorian processors are buying up big on NSW mutton as national sheep slaughter rates hit record highs and wary producers offload.

The amount of sheep slaughtered has hit the highest weekly number since 2006, as processors switch away from lambs to sheep.

This comes as the gap between prices for the two stretches to the second widest on record.

New figures released by Meat and Livestock Australia today show that for the week ending October 25, 246,524 sheep were slaughtered nationally.

This move has tempered lamb returns – after they touched 900c/kg last week – but is firming up mutton rates.

Many producers are now taking the chance to sell older sheep, with mutton selling for 320c/kg to 370c/kg carcass weight in early sales this week.

Concerns over low rainfall in many districts has compounded the sell incentive, with producers wary of supply gluts if conditions worsen in Victoria and South Australia.

MLA analyst Erin Lukey said processors moved to more sheep due to the “significant price gap of 542c/kg” between mutton and lamb indicators.

Ms Lukey said the sheep selldown came at a time when the ewe base was high, and Victorian processors were heading north to NSW, where conditions were better, to buy better weighted sheep.

Action from the Corowa sheep sale.

She said the latest slaughter data, week ending October 25, revealed Victorian sheep slaughter was the “secondly highest weekly number on record since 2018”, and the total for the year so far was up 23 per cent.

The pattern was similar in NSW, up 20 per cent year to date, and South Australia, up 39 per cent.

“This turn-off is mimicking the drought-driven turn off of 2018, but this is more older stock being sold, versus liquidation of the flock,” she said.

VFF livestock president Scott Young said it was just as well slaughter was high, as it may help avoid a glut if the short growing season experienced in most of Victoria continued to fade.

“We look like we are heading into another very challenging situation, parts of Gippsland are already really struggling (for moisture, feed) and parts of south west Victoria too,” Mr Young said.

“Nowhere in the state has loads of pasture growth this spring, few areas are looking OK.”

Elders livestock agent James Kennedy from Finley, NSW, said “every company is having a crack at trade and heavy lambs and older sheep”.

“There is definitely a margin there for them to keep going,” he said.

Elders Finley agent James Kennedy at Wycheproof.

However, he questioned what the sell-off might mean in the future.

“In the southern Riverina, we have been selling suckers, and our clients are pleased with the results they are getting,” he said.

“Even the store job is holding up at $140 to $160.

“There is a lot of good, heavy and well-conditioned sheep being offloaded at the moment.”