AUSTRALIAN sheep producers continue to achieve record high prices off the back of strong export demand and tightening supply, according to Rural Bank’s Australian Lamb and Sheep Meat Annual Review 2018.
A tightening supply in June has caused the Eastern States Trade Lamb Indicator to reach a record high of 712c/kg, with prices expected to remain stable through winter, before easing in spring and into summer.
The price of lamb and mutton exported in January to April 2018 also increased by five and 3.5pc 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 $622m to reach $3.7b.
Strong demand from the US, China and the Middle East continues to support higher prices.
In 2017, China overtook the US as Australia’s top lamb export market by volume and registered a remarkable 63pc jump in export value to $265m.
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 the historically high prices.
Live sheep exports, which remain in the media spotlight, are a considerable part of the industry, contributing $249m and accounting for 31pc of Western Australia’s sheep and lamb offtake in 2017. Rural Bank sales and distribution general manager Simon Dundon said the 12-month outlook for producers was positive.
“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,” Mr Dundon 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 hop 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 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.
