IT has been the best year on record for sheep producers, and the stellar season shows no sign of slowing with a recent report predicting prices to remain stable until summer.
A tightening supply in June has caused the Eastern States Trade Lamb Indicator to reach a record high of 712c/kg, with lambs in Ballarat selling for an astounding $267 last month.
According to Rural Bank’s Australian Lamb and Sheep Meat Annual Review 2018, prices will remain high for at least another few months.
“The Australian sheep industry has had an extraordinary run over the last few years, and with continued and robust global demand supporting prices, we expect to see increased opportunity for our sheep meat producers,” Simon Dundon, general manager of sales and distribution for Rural Bank, said.
“Drier conditions in the first six months of 2018 pushed slaughter rates higher and placed downward pressure on prices, but with demand remaining strong, prices have only decreased slightly under the weight of this extra supply.
“The outlook for our sheep industry remains positive, although producers will be hoping for better seasonal conditions in the second half of 2018 to allow for flock expansion, and the opportunity to capitalise on the ongoing increased demand from export markets.”
The price of lamb and mutton exported in January to April 2018 increased by five and 3.5 per cent respectively, due to increased slaughter rates and higher export volumes.
This follows strong export volume growth in 2017 which saw the industry’s value rise by $622 million to reach $3.7 billion.
Strong demand from the US, China and the Middle East continues to support higher prices.
While the outlook for 2018 remains positive for sheep producers, drier than average conditions have forced some producers to purchase more feed or consider turning-off stock, rather than increasing flocks to benefit from these historically high prices.
Live sheep exports – which remain in the media spotlight – are a considerable part of the industry, contributing $249 million and accounting for 31 per cent of Western Australia’s sheep and lamb offtake in 2017.
The Australian Lamb and Sheep Meat Annual Review – developed by Rural Bank’s Ag Answers division – provides producers and industry with a concise analysis on lamb, mutton and wool production, seasonal conditions, prices and demand in Australia and the international market.
The full Australian Lamb and Sheep Meat Annual Review can be read at www.ruralbank.com.au/sheep.