Supermarket lamb prices down as food inflation slows

The meat aisle is providing less “sticker shock” for shoppers, with lamb prices in deflation. Here’s why the drop is good for farmers.

The price of a leg of lamb at the supermarket has dropped compared with year-ago rates, as food inflation slows, in good news for both consumers and Australia’s sheep industry.

Cheaper prices could lead to a lift in sales of affordable lamb meat and help ease a backlog of lambs at processors, one industry expert has forecast.

Victorian Farmers Federation livestock group president and lamb producer Scott Young said the softening prices could be partially attributed to saleyard prices coming down off soaring highs, and any up-tick in sales would be a positive for producers.

“We’ve still got an oversupply of lamb at the moment, from the previous really wet spring, winter and summer,” Mr Young said.

“There are still a lot of lambs going through the processors gradually. There’s still that big oversupply compared to what we would normally have.”

Scott Young, Ferleigh Park operator and VFF livestock group president said cheaper lamb at the supermarket could help ease a backlog of animals waiting to be processed. Picture: Zoe Phillips

Mr Young described food price inflation and the swollen lamb market as a “double whammy” for producers.

“Our animals didn’t finish through the spring and summer like we would have liked, so we’ve had to feed them an extra period of time, with no uplift in price like we’d normally get,” Mr Young said.

A recent Rabobank report showed Australian food price inflation has slowed to 8 per cent, down from 9.2 per cent in the December quarter.

In particular, meat product prices have softened, with lamb prices in the March quarter actually declining 2.4 per cent year on year, compared with a 3.2 per cent year-on-year increase recorded in the previous quarter.

Rabobank senior food retail analyst Michael Harvey said while Australia might have passed peak food inflation, figures were still sitting well above the 10-year average of 2.2 per cent.

And prices could remain elevated for some time, Mr Harvey said, maintaining pressure on the cost of living.

“ … we will also be keeping a close watch on global pressures which have contributed to the food inflationary pressures, such as commodity markets, supply chain shocks and elevated energy prices,” Mr Harvey said.