LAMB producers will enjoy higher prices in the coming year, driven by strong export demand and falling local sheepmeat production.
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The steady decline in Australia's sheep flock will continue in 2014-15, sliding to 70 million by year's end, ABARES said in its latest quarterly agricultural commodities report.
ABARES said saleyard lamb prices had increased 30 per cent between January and May to about 557 cents a kilogram (carcase weight), the highest monthly average since mid-2011.
Average lamb saleyard prices for 2013-14 as a whole were estimated by ABARES to have averaged about 475c/kg, a year-on-year increase of 23pc and were tipped to lift by another 5pc in 2014-15 to 500c/kg on the back of reduced lamb supply because of a depletion of breeding ewes.
Lamb production was forecast to drop by 7pc in 2014-15 to 440,000 tonnes, in line with a 7pc slide in lamb slaughter to 20.3 million.
Lamb production in 2013-14 was estimated to have lifted by 3pc to about 471,000t, the largest volume on record.
Australian lamb exports lifted by an estimated 11pc in 2013-14 to a record 223,000t, driven by stronger demand in major Asian export markets, particularly China and Hong Kong.
However, lamb exports were forecast to decline by 12pc in 2014-15 to 197,000t because of reduced availability.