For the first time since 2016, mutton prices have dropped below $3/kg carcase weight, currently down 98¢ since the start of the year – a fall of 25%.
In contrast, the Trade Lamb Indicator (TLI) has risen 4% and the heavy lamb indicator is up 4.6% over the same time frame. Light lamb’s trajectory is following that of mutton – down 7%.
In the first four weeks of 2023*, there have been 165,364 ewes offered in Australia’s saleyards. This is a 78%, or 72,600, increase compared to the first four weeks of sales in 2022 when 92,731 head were transacted.
In 2021 and 2022, ewe supply dropped by 33% and 51% respectively as producers retained ewes to rebuild their flocks. With an increase in supply from the start of 2023, mutton prices have fallen and now average under $100/head year at $90.23 – the lowest since 2016.
In the week ending 22 January 2023, mutton slaughter was at 158,000 head. This is a 68% increase, or 64,000 head, in comparison to the same week in 2022. This trend of increased mutton supply is something Meat & Livestock Australia (MLA) expects to continue throughout the year.
Since the beginning of 2023, lamb prices have strengthened more than 4% in the trade and heavy categories. This increase has been achieved with the heavy lamb indicator having a throughput of over 50,000 head, which is similar to 2022 levels. Therefore, there is not likely to be an oversupply of lamb this year and prices of lamb will remain stable.
There are significant ewe numbers on the ground and lambs available due to improved seasonal conditions. As a result, producers are now being more selective about the animals they are keeping in their flock and sending poor performing stock to market. This is affecting mutton and light lamb prices.
Over the last two years producers retained ewes that would have otherwise been culled to boost their breeding ewe numbers, which caused prices to rise. Now those older ewes are hitting the market.
Encouragingly, strong demand for lamb is currently keeping lamb prices stable based on current levels of throughput.
Looking forward, while forecasts of larger yardings and volumes in the mutton market will continue – and therefore prices decrease, on-farm stock quality will be higher. This will reflect in high quality trade lambs hitting the market later in the year and a more stable market throughout 2023.