Sky-high lamb prices forecast to dip, but only slightly

Zach RelphCountryman
The Eastern States Trade Lamb Indicator hit 950¢/kg carcase weight last week.
Camera IconThe Eastern States Trade Lamb Indicator hit 950¢/kg carcase weight last week. Credit: Bob Garnant / Countryman

An expected increase in lamb supply should ease prices from current record highs but not too drastically, according to a bullish market analyst.

The Eastern States Trade Lamb Indicator was strong at 950¢/kg carcase weight on Monday, with lamb producers nationwide continue to relish processors’ buoyant purchasing driving prices skyward.

Mecardo analyst Angus Brown said high prices had previously encouraged stronger supply and caused value to drop.

However, while forecasting a slight fall in lamb’s value, Mr Brown said the market would remain upbeat.

“After this year’s peak, lamb prices should fall. This is assuming demand is steady,” Mr Brown said.

“While prices might fall, they are likely to spend the next three years at levels higher than any time before 2019.

“If demand continues to rise, there’s every chance lamb prices could be stronger.”

Heavy lambs fetched up to $211 a head at the Katanning Regional Saleyards last week, after a WA lamb-selling record of $289 a head was set at the Great Southern livestock trading facility last month.

The strong lamb market comes as the Eastern States Mutton Indicator last week reached 594¢/kg cwt to notch an 82¢ hike year-on-year.

Meat and Livestock Australia senior analyst Adam Cheetham said although lamb was “stealing the spotlight”, mutton was maintaining its historically high levels of near 600¢/kg cwt.

“Mutton prices have largely tracked sideways in recent weeks after a sustained rise similar to the lamb market,” Mr Cheetham said.

“The continued strength of mutton prices signals buyers in the market are looking to guarantee supplies to satisfy export demand.

“The seasonality surrounding mutton markets shows prices typically peak at the beginning of winter before entering a period of decline in late July.”

Mr Cheetham said a seasonal price decline would be due to the historical increases in slaughter towards the end of the winter months.

“Since the beginning of June, mutton slaughter has been in line with the five-year average,” he said.

“For the week ending July 5, mutton slaughter totalled 92,101 head, increasing 10 per cent from the five-year average.”

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