Elders Business Intelligence Analyst Richard Koch discusses his data driven forecast for the Australian sheepmeat market this autumn.
The sheepmeat complex remains under the influence of seasonal conditions and forced turnoff across southern Australia. Hot and dry January weather burnt off any pastures that were remaining, while stock water availability is a widespread problem from southern and western NSW, through most of Victoria, South Australia and Western Australia.
After showing some signs of falling back to more normal levels at the end of 2024, sheep and lamb slaughter has pinged higher again as producers continue to liquidate sheep flocks in response to seasonal conditions. Supplies of heavy sheep and lambs above 26kg dressed weight are starting to tighten and saleyards are increasingly comprised of mixed quality lighter sheep and lambs.
This chart shows Australian sheep slaughter in 24/25 vs 23/24 and the seven-year average. Source: National Livestock Reporting Service.
This chart shows Australian lamb slaughter in 24/25 vs 23/24 and the seven-year average. Source: National Livestock Reporting Service.
Prices did improve in December as processors sought to lock in slaughter schedules over Christmas/New Year. Heavy bookings through this period meant that slaughter space was hard to find for sheep and lambs that came forward after a hot and dry January. In WA, processors fearing reduced availability of slaughter lambs put lambs into feedlots during Nov/Dec and are now working through these supplies which has contributed to weaker processor demand and has limited available processing space during the February.
While saleyard prices have been volatile, direct to works quotes have been more stable at around $8 to $8.50/kg dw (dressed weight) for heavy lambs and $7.50 to $8/kg dw for trade lambs which is 50c to $1/kg dw below our forecast levels. The lack of water in many areas has also limited restocker and feeder demand, contributing to reduced demand through late summer and meaning that these lamb prices have fallen short of our forecasts.
Mutton values have held steady through the quarter despite ongoing elevated slaughter levels which have supressed prices. In WA, sheep producers are moving to liquidate flocks after successive below average rainfall seasons and concerns about viability given the impending closure of the live sheep trade. In the absence of regular live export boats processors have had trouble processing the volume of sheep coming forward in WA.
Source: National Livestock Reporting Service (NLRS), Elders forecasts
The message from our agent network remains that lamb and mutton supplies are set to tighten as we move into autumn - a result of the heavy ewe cull the past few years, lower joinings and lambing percentages (hearing that lamb scanning rates for the coming lamb drop out of SA are dire) due to adverse seasonal conditions across the south. Last year’s lamb drop was the lowest in several years which will mean lamb slaughter will ease sometime in 2025.
We expect both sheep and lamb slaughter levels to start easing as we move into the autumn quarter, allowing lamb values to appreciate. Heavy and trade weight lamb prices should rise independent of seasonal conditions as available supplies tighten, however, supplies of light and restocker lambs will be influenced by Autumn conditions which will also impact demand and may limit the ability of these to meet price forecasts.
This chart shows the national saleyard indicator prices and forecast prices for major sheepmeat livestock categories in c/kg dressed weight. Source: National Livestock Reporting Service (NLRS), Elders forecasts.
Source: National Livestock Reporting Service (NLRS), Elders forecasts.
