MUTTON prices have sustained an upward trajectory for much of this year surging well above last year's prices spurred on by ongoing demand from key export markets and tight domestic supplies carried over from last year.
At the close of the 2014-15 financial year The Land's mutton indicator had hit 405 cents a kilogram (carcase weight).
That's about 45c/kg higher than the close of the 2013-14 period.
G.J. Hulm and Company agent Isaac Hill, Wagga Wagga, said a combination of tight supply, a lower dollar and strong export demand were all coming together to help boost mutton prices.
"It's not unusual for prices to peak at about this time of year, as it's traditionally when supply is the tightest, but overall in the past six months the market for mutton has been buoyant," Mr Hill said.
"There's demand across the globe for protein that needs to be filled and Australian mutton is part of that market."
Mr Hill said the good season and a low, but sustainable, and regular supply of mutton was keeping prices ticking along.
"For people selling aged sheep they could get $130 a head and then look to spend upwards of about $200 on younger ewes," he said.
"That's (the good prices for aged mutton) a good start toward buying ewes in the spring."
However, the strong prices do have some analysts asking if the prices are sustainable and likely to hold after the peak prices of winter.
Mecardo analyst Angus Brown reported in July that there were suggestions of weaker mutton and lamb demand being caused by better than expected sheepmeat production in China.
"This means China has to import less," Mr Brown explained.
"China is our biggest sheepmeat export market and the data confirms weaker demand.
"Mutton exports to China for the year to date are down 36 per cent on last year.
"For May and June, mutton exports to China have been down 55pc."
All up China took 41,213t of Australian mutton in 2014-15.
How long the weaker demand out of China for mutton lasted was anybody's guess, but Mr Brown said exports generally ramped up in the second half of the year as supply improved, and Chinese domestic supply waned.
He said a reasonable spring should mean mutton prices remain relatively strong on tight supply.
"However, the concern would be an increase in supply due to a dry spring coinciding with weaker Chinese demand," he said.
"This could see mutton values fall under 300c/kg.
"A return of strong Chinese demand, combined with a flock rebuilding effort, would be likely to see mutton values gain a further 10pc to 15pc."
Taking an overall look at the export figures for 2014-15 the Department of Agriculture report mutton exports reached 169,492 tonnes (shipped weight).
This is a hefty figure, but it's 7pc lower than the 2013-14 record which was largely driven by surging sheep slaughter.
With tighter supplies reflected in the lower export volume in the past 12 months, Meat and Livestock Australian market information manager Ben Thomas said it should be noted the 2014-15 volume was still considerably higher (38pc) than the five-year average of 122,724t.
Mr Thomas said the Middle East surpassed China to again become the largest market for Australian mutton in 2014-15.
Shipments to the region were up 21pc year-on-year and 19pc higher than the five-year average, at 52,644t.
Demand from South East Asia continued to strengthen during 2014-15, with shipments lifting 6pc year-on-year, to 27,174t - up 79pc on the five-year average for the region.
The US market also took more (12pc) Australian mutton at 11,752t, while exports to the European Union were 17pc lower than the previous year, at 4487t.