Why lifts in mutton prices can’t be sustained

The “extraordinary” mutton price rollercoaster ride is expected to end, with prices set to dip again.

A price rise for mutton has proved short lived in a rollercoaster ride that has had rates jump $40 and lose $25 within a week.

While the national mutton indicator showed a massive lift of 61c/kg to close at 170c/kg carcass weight at the end of the week, it lost ground after sales on Monday at Bendigo and the NSW centres of Corowa and Dubbo, NSW.

It closed early this week at 158c/kg carcass weight, while the Victorian indicator was lower at 138c/kg.

National Livestock Reporting Service reporter Tim Delaney judged the Bendigo market lost $15-$25 on last week’s improved rates, partially due to the big increase in the offering which was up 9650 to 13,750 sheep.

“Not all processors operated in a subdued market that lacked competition,” Mr Delaney said.

He said most mutton made 80-140c/kg.

Auctioneers call for bids at the Jerilderie sheep sale, where a lift in mutton prices could not drive rates up.

Vendors at Dubbo, NSW, missed last week’s price surge due to no sale because of the public holiday and most better sheep were quoted at 115-135c/kg carcass weight after this week’s sale.

Wagga Wagga agents are not expecting a repeat of last week’s stellar market where buyers went head-to-head to secure numbers, pushing prices up to $42 higher for Merino ewes and $36 for crossbreds.

Nutrien Wagga Wagga manager Peter Cabot described last week’s market as “extraordinary” but something he didn’t think would happen again this week.

“Who would know what will happen but what we do know is that mutton prices could be a lot dearer than they are,” Mr Cabot said.

While some sheep are making $10-$15, Mr Cabot said the worse outcome was for heavy sheep, which last year made $150 and were now making $22-$28.

“The biggest problem in the mutton market is for those big lines of ewes, maybe 400 or 500, that are 70-80kg and make less than $30,” he said.

“That is the diabolical part of the mutton market — when good sheep are making 100c/kg or less.”

Mutton prices had a brief lift, but are back down again this week.

Meanwhile mutton export markets continue to surge with the September figure of 16,436 tonnes up 14 per cent on the five-year average.

Episode 3 director Matt Dalgleish said it was not surprising to see export volumes booming as Australian mutton was “significantly cheaper than last year”.

Mr Dalgleish said China was a dominant player in mutton this year, taking up to 45 per cent of total volumes.

China took 8863 tonnes of Australian mutton in September, with other major destinations of Malaysia and Saudi Arabia also increasing their imports.