May's sheep market update

Highlights for sheep

• Australian lamb markets have gained ground over the past month, in what has been a disrupted period with the Easter and ANZAC day public holidays. The National Trade Lamb Indicator has lifted 19 cents over the past month to 829 c/kg. This marks a 161 cents (+24.2 per cent) increase year-on-year. Prices have found support from increased access to the Chinese market. While processors are having to work harder to maintain processing rates with tightening mutton supply. However, dry conditions continue to promote higher turn-off and reduced restocker demand. Parts of southeast Australia remain exceedingly dry, with many still looking for decent rainfall.
• Lamb processing rates have continued at an elevated level either side of the weeks interrupted by public holidays. Weekly lamb slaughter has consistently exceeded 500 thousand head on the full operating weeks. While comparatively, mutton slaughter appears to be slowing. Lamb slaughter is forecast to remain elevated throughout May but then supply is expected to slow.
• Prices are projected to continue higher through May. The tightening supply of mutton will see increased buying interest for lambs for processors to maintain throughput. The dry conditions through South Australia and parts of New South Wales and Victoria are concerning. However, a decent autumn break would go a long way towards reducing turn-off. It is also a long way back for some of these seasons, with low stock water availability in some areas also adding to the pressure on growers.

Joe Boyle

Agricultural Analyst

Joe is our Insights specialist for sheep and wool industries. He hails from a cropping and sheep farm in northwestern Victoria and has studied a Bachelor of Agriculture at the University of Melbourne.