Dry early spring conditions saw a massive turnoff of sheep across southern Australia. This saw sheep values pull back sharply, increasing sheep processing margins and encouraging some processors to focus on sheep slaughter at the expense of lamb. This led to price declines across the whole sheepmeat complex.
In mid-October widespread storms across parched areas of southern Australia encouraged pasture growth and allowed graziers to take a more strategic approach livestock marketing. While sheep slaughter rates remained elevated, there are cracks appearing in slaughter schedules which has allowed prices to recover.
Processors are struggling to find sufficient trade and heavy weight lambs and are adjusting minimum weight specifications downwards. Tellingly, processors with feedlots have been actively sourcing store lambs to put on feed to ensure adequate future supplies with signs that lamb availability will far tighter than in previous years.
Demand from graziers for restocker and light lambs to put onto failed crops or those bailed for hay due to frost has lifted the lighter end of the market. With store lamb prices well below slaughter values and large available supplies of these types, lamb feedlotters have been actively filling up feedlots.
The large and sustained sheep turn-off since midway through last year means that the Australian sheep flock is very young with Elders agents anticipating that kills will soon ease. Already, mutton values have begun firming in anticipation of a tightening in supply.
This chart shows the weekly lamb slaughter 2024 vs 2023 and 5 year average. Source: National Livestock Reporting Service.
Lamb slaughter has eased below last year’s levels due to lower joinings and lambing percentages and the poor season making it difficult to get southern lambs to slaughter weights.
Tight lamb availability should support lamb values into year’s end.
Heavy lamb values resume upward trend
After being dragged lower by heavy sheep slaughter, heavy lamb values have resumed their upward trend as supply tightens. The smaller lamb drop, and the absence of feed availability in early spring has meant that producers have been unable to fatten lambs to export weights. The improvement in the season in recent weeks means that prime lamb producing areas in western Victoria and southeast South Australia will have some supplies of these lambs but at numbers well below previous years.
Australian imported lamb prices in the US are up around 20 per cent (pc) in the past month, which augurs well for the heavy lamb category which is reliant on the US market. Stronger lamb prices mirror what we are seeing in beef as the US economy strengthens.
This chart shows the national saleyard indicator price for heavy lambs 2024 vs 2023 and 5 year average. Source: MLA.
Heavy lamb values should push up towards 900c/kg for any producers who can get these lambs to export weights.
Heavy lamb numbers will be well below previous year levels across southern lamb producing areas, with processors dependent on central and northern (won’t be available till early 2025) NSW for heavy lamb supplies.
Rising prices for lamb on the US market will help underpin the firmer price trend.
Processors adjust minimum weight specifications for supermarket lambs
The difficulty in sourcing slaughter weight lambs has seen several domestic trade processors adjust their minimum weight specifications lower. Like with heavy weight lambs, the poor spring combined with lower ewe joinings and weaker lambing percentages means that lambs available of trade weights will be much lower.
Most mixed farmers are now concentrating on harvest which has tightened availability through key central NSW areas. This should see trade lamb prices continue to increase into year’s end.
This chart shows the national saleyard indicator price for trade lambs. Source: MLA.
With most mixed farmers concentrating on harvest, trade lambs will be in short supply the next few weeks and prices should continue to rise.
Demand from graziers to put lambs on failed crops supports light lamb prices
Light lamb values have held up well as graziers with failed crops have stepped into this market and provided support. Demand continues from the Middle East at levels above last year, despite regional conflicts and higher prices. So far this year, our export volumes to the Middle East have increased by nearly 80 pc to 75,000 tonnes.
This chart shows the national saleyard indicator price for light lambs. Source: MLA.
Light lamb values have held up well due to demand from graziers to put onto failed crops or those bailed for hay due to frost has lifted the lighter end of the market.
The premium for trade and heavy weight lambs will encourage graziers to feed these lambs to achieve heavier weight specifications and earn the associated premiums.
Restocker lamb market proves resilient
Buying by lamb feedlots has supported the store lamb market through the past couple of months. The heavy discount to slaughter lambs and improved pasture conditions due to widespread storms in mid-October and the strong prospect for further gains in slaughter lamb values has encouraged a lift in restocker activity. Restocker lamb values should follow the slaughter market higher through the end of 2025.
This chart shows the national saleyard indicator price for restocker lambs. Source: MLA.
The large discount to slaughter lamb values and the strong slaughter lamb price outlook has encouraged a lift in restocker buying.
Sheep values recover despite another lift in slaughter
Despite another lift in sheep kill rates, mutton values have started to recover as the end is nigh for sheep supply. The sustained heavy sheep kill over the past two years means that we now have a very young flock and Elders agents are reporting that they expect the heavy run of sheep slaughter is about to run its course.
Any let up in supply will see sheep values rebound further.
This chart shows the national saleyard indicator price for mutton sheep 2024 vs 2023 and 5 year average. Source: MLA.
Mutton values have taken a battering from heavy supplies, but market sentiment is changing with the outlook for sheep supply expected to tighten considerably into the back end of 2024 and early 2025.
This should allow prices to recover back towards 5 year averages. There just isn’t going to be the sheep out there.
This chart shows the weekly sheep slaughter 2024 vs 2023 and 5 year average. Source: National Livestock Reporting Service.
Goats on the rise
Ripley Atkinson from StoneX reports that 2024 goat slaughter has already reached its highest level on record, with two months remaining in the year while values are also on the rise.
October Over-the-Hooks (OTH) prices for 12 to 16kg dw goats, have recovered by 59 pc or 122c/kg cwt since October 2023. To 325c/kg dw.
Australia exports on average 55 to 60 pc of its goatmeat each year to the US. This year, goat exports to the US east coast have lifted 122 pc, more than compensating for reduced Chinese demand.
Why is this relevant and important? In 2022, goat prices softening in from their record highs of $10/kg cwt were a lead indicator for the rest of the sheepmeat market to follow.
While goats remain well off their highs, the trend is promising. Particularly if it signals strengthening US demand for sheepmeat. Australian imported lamb prices in the US are up around 20 pc in the past month, which augurs well for the heavy lamb category.
From the rails
Read what Elders livestock representatives from around Australia are saying about the markets in their regions.
“Some processors have dropped their weight spec for supermarket lambs on the lower end to 20kg, which reiterates what everyone's saying that lamb supply is tightening up. They're back to 20kg at $8.60/kg.” - Nic Hannaford, Elders State Livestock Manager, NSW
| NSW sheepmeat saleyard indicators | ||||
| 31 October 24 | +/- week | +/- month | +/- year | |
| Lambs | ||||
| Heavy | 833 | 869 (-36) | 769 (+64) | 506 (+327) |
| Trade | 794 | 837 (-43) | 775 (-19) | 478 (+316) |
| Light | 667 | 743 (-76) | 673 (-6) | 335 (+332) |
| Restocker | 717 | 709 (+8) | 21 (+104) | 339 (+378) |
| Mutton | 330 | 311 (+19) | 307 (+23) | 123 (+207) |
The table shows New South Wales sheepmeat saleyard indicators as at 31 October 2024 and comparison to last week, month and year. Source: MLA
| Victorian sheepmeat saleyard indicators | ||||
| 31 October 24 | +/- week | +/- month | +/- year | |
| Lambs | ||||
| Heavy | 839 | 837 (-2) | 792 (+47) | 520 (+319) |
| Trade | 824 | 817 (+7) | 754 (+70) | 488 (+336) |
| Light | 733 | 688 (+45) | 585 (+148) | 400 (+333) |
| Restocker | 743 | 725 (+18) | 656 (+87) | 354 (+389) |
| Mutton | 348 | 313 (+35) | 287 (+61) | 96 (+252) |
The table shows Victorian sheepmeat saleyard indicators as at 31 October 2024 and comparison to last week, month and year . Source: MLA
“Lamb job is about $8.20/kg, the very best of what we're seeing. Yards are making a little bit better than that on those real sappy hard lambs that are just starting to roll out of the south now. Your best lambs in the yards are making a bit better than that store lamb. Lambs had a bit of a kick last week, which was probably based around the rainfall from the previous week.
“Inquiry for stores from Shepparton and surrounds while a major processor has bought a heap of them to put on feed like what they’ve done in the west. They are very strong on filling up feed pens.
“Mutton job is at $2.70 to $3/kg, I would think that is cheap moving forward. Just quite a bit of resistance with one group last week and we got to $3.20/kg. So, there is a bit of upside on that sheep side as we go forward.” - Laryn Gogel, Elders Livestock Sales Manager, SA
| SA sheepmeat saleyard indicators | ||||
| 31 October 24 | +/- week | +/- month | +/- year | |
| Lambs | ||||
| Heavy | 829 | 818 (+11) | 704 (+125) | 497 (+332) |
| Trade | 753 | 839 (-86) | 760 (-7) | 488 (+265) |
| Light | 722 | 763 (-41) | 514 (+208) | 406 (+316) |
| Restocker | 681 | 694 (-13) | 456 (+225) | 351 (+330) |
| Mutton | 273 | 226 (+47) | 237 (+47) | 90 (+183) |
The table shows South Australian sheepmeat saleyard indicators as at 31 October 2024 and comparison to last week, month and year . Source: MLA
“On the lamb front things are starting to get a little bit interesting over here. The slaughter market has come back a little bit to around that $6.70 to $6.80/kg for 20kg plus.
“Processing space has been a little bit tight, and a lot of bookings have been made, but I'm not quite sure that the lambs are out there. I think over the next fortnight it will sort itself out as we’ve got hot weather forecast. This will bring up the grass seeds through that southern area, and while the lambs have been pretty good, it'll force guys into shearing. But I'm just not quite sure that the volume aligns with what the processors are talking.
“We have started to get a lot more interest from the eastern states on store lambs over the last week. Prices were sitting around that $2.60/kg lw but there seems to be a little bit of $3/kg lw around especially on those 35kg plus types. Think the $3/kg will be in abundance once we start shearing those lambs in another two or three weeks. Lambs have been very good, nice and sappy through most areas this year.
“I think there is plenty of interest in lamb from WA. A major processor over here with a 40,000 head feedlot has been busy filling it up. The other two major processes are also tucking lambs away for a bit later. The market seems a little bit stronger with interest from the east.
“Finally, we look like having a decent live export boat in the second or third week in November with a 60,000 head capacity – although the price is not flash at $65 to $80/head. It'll be a Saudi scratch boat, but everyone will be happy to start moving the backlog that's been building up. Virtually since May, we've only had really two shipments. So it'll be nice to move that volume of wethers which will hopefully inject a bit more competitive tension.
“The market that's been tough and it's probably been tough everywhere is the breeder ewe market? We've got a few more sales planned. We've only had one other sale this year and it was at Wickepin earlier where we came out at $100/hd.
“Mutton seems to have settled around that sort of $2.70 to $2.80/kg dw for 18 to 26kg mutton. Back about 30 cents under 18 kgs to $2.50/kg dw with supply from the southern areas starting to move through. After last year we have a young flock. So, I'm not expecting huge numbers or a long run on the mutton.” - Wayne Peake, Elders Livestock Sales Manager, WA
| WA sheepmeat saleyard indicators | ||||
| 31 October 24 | +/- week | +/- month | +/- year | |
| Lambs | ||||
| Trade | 636 | 598 (+38) | 589 (+47) | 388 (+248) |
| Light | 524 | 485 (+39) | 449 (+75) | 281 (+303) |
| Restocker | 399 | 366 (+33) | 350 (+49) | 143 (+256) |
| Mutton | 224 | 195 (+29) | 233 (-9) | 71 (+153) |
The table shows Western Australian sheepmeat saleyard indicators as at 31 October 2024 and comparison to last week, month and year . Source: MLA
“The sheep and lamb job continues nicely with better lambs trading in the $7.80 to $8.20/kg dw range while mutton fluctuated throughout the month from $2.80 to $3.50/kg dw.” - Gavin Coombe, Elders State Livestock Manager, Tasmania
| TAS sheepmeat saleyard indicators | ||||
| 31 October 24 | +/- week | +/- month | +/- year | |
| Lambs | ||||
| Trade | 743 | 755 (-12) | 742 (+1) | 429 (+314) |
| Light | 707 | 686 (+21) | 628 (+79) | 391 (+316) |
| Restocker | 570 | 548 (+22) | 639 (-69) | 244 (+326) |
| Mutton | 238 | 270 (-32) | 238 (n/c) | 52 (+186) |
The table shows Tasmanian sheepmeat saleyard indicators as at 31 October 2024 and comparison to last week, month and year . Source: MLA
Sources: Price data reproduced courtesy of Meat & Livestock Australia Limited.
*Disclaimer – important, please read:
The information contained in this article is given for general information purposes only, current at the time of first publication, and does not constitute professional advice. The article has been independently created by a human author using some degree of creativity through consultation with various third-party sources. Third party information has been sourced from means which Elders consider to be reliable. However, Elders has not independently verified the information and cannot guarantee its accuracy. Links or references to third party sources are provided for convenience only and do not constitute endorsement of material by third parties or any associated product or service offering. While Elders has exercised reasonable care, skill and diligence in preparation of this article, many factors including environmental/seasonal factors and market conditions can impact its accuracy and currency. The information should not be relied upon under any circumstances and, to the extent permitted by law, Elders disclaim liability for any loss or damage arising out of any reliance upon the information contained in this article. If you would like to speak to someone for tailored advice specific to your circumstances relating to any of the matters referred to in this article, please contact Elders.