Independent Livestock Analyst, Simon Quilty of Global Agri Trends shares his thoughts on movements in Australia’s sheep sector.
Last week's Australian Bureau of Statistics (ABS) data revealed that mutton slaughter reached the breakeven point for liquidation and rebuilding at 2 million head. Given the momentum of tight supply in lamb and mutton, not easing in the weekly data, it would be a fair assumption that the rebuild has commenced in Q4, the quarter we are in.
This chart shows Australian quarterly mutton slaughter from 2010 to 2025. Source: ABS
Both lamb and mutton slaughter have fallen off a cliff, down 27 per cent (pc) and 43 pc, respectively, and with lighter carcass weights, production has fallen even further.
None of this is a surprise, given the dryness of southern Australia over the last two years and the heavy turnoffs we have seen. My forecast for July/August next year of 1350 ac/kg CWE for heavy lambs and trade lambs is still on track.
How sustainable is this? It's important to note that much of today's higher livestock pricing is due to strong demand, and the further higher prices moving forward will be more due to tighter supplies, the hallmarks of a rebuild.
But, as with any rebuilding period, prices rise 30 pc and fall 30 pc. These prices are ultimately unsustainable, as livestock numbers will build over three years, leading to lower prices.
I believe the long-term price trade/heavy lambs will settle at 950 ac/kg CWE in 2028 to 2033. I call this the new norm, and it is sustainable for producers and processors.
Last week's ABS data supports this view of stronger lamb and mutton prices over the next three years until prices fall back to the new norm, ensuring a sustainable future.
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