THE historically high lamb, wool and sheep prices continue to encourage producers to retain ewes and wethers during the past year.
That’s been confirmed by the Meat and Livestock Australia Sheep Industry Projections which were released this week.
MLA Market Information Services manager Ben Thomas said after high turnoff in 2014, many producers were rebuilding their flocks.
As a result, there had been a reduction in stock available for slaughter during the past few years.
Mr Thomas said sheep slaughter for the year-to-May was down 14 per cent year-on-year, to 2.9 million head.
However, as part of the MLA forecasts, the ewes and wethers that have been retained this year and last were predicted to start coming back through the system.
“The intent to retain older ewes has eased since the February MLA and Australian Wool Innovation Wool and Sheepmeat Survey wave,” Mr Thomas said.
“As a result, there was a slight upwards revision from the April update to the 2017 forecast, to six million head (the previous forecast was 5.8 million head).
“This will still be almost one million head less (14pc) sheep processed in 2017, compared to last year.”
For 2018, Mr Thomas said there had been considerably greater revision to the projected number of sheep to be processed, to 6.9 million head.
For year-to-May, mutton production totalled 69,682 tonnes (carcase weight). Mr Thomas said this was back 11pc on last year.
“For the first five-months of this year, national sheep carcase weights averaged 3pc higher than last year, and 8pc above the five-year average for the period, at 24.19 kilograms a head,” he said.
The rise in carcase weights was in line with the long-term trend that was largely due to advances in genetics and improved management practices.
Mr Thomas said Australian sheep carcases were expected to average 24kg/head for 2017 – up 1pc year-on-year.
“As a result, there has been an upward adjustment to mutton production from the April update – to 144,000t for 2017. This will be a 13pc decline on 2016 levels.”
Lamb prices hinge on season
Despite a strong performance for the first half of the year due to limited stock supplies, the lamb market has been hit by winter price volatility.
Early this week The Land’s trade lamb indicator was on 614 cents a kilogram (carcase weight), which was up nearly 40c/kg on the week before.
However, this was on the back of a yoyo trend for the past month – up one week then down the next.
MLA Market Information Services manager Ben Thomas said a dry winter across many key production areas and poor seasonal outlook to October would create further uncertainty for the lamb market.
While prices were still strong, he said the market would hinge on the season and feed availability during spring, along with the extent to which processing capacity could absorb the predicted eventual recovery in supplies.
“This poses a risk for when lamb availability does begin to ramp up, particularly if seasonal conditions don't improve,” he said.
