OFFSHORE consignments of mutton continue to run at levels significantly higher than previous seasons.
Monthly consignments of mutton exported offshore totalled 20,406 tonnes swt during October, an increase of 7pc on the September figures.
This places the October result as the highest monthly total on record and is 19pc more than we saw during October of 2017 and 31pc more than the five-year seasonal average for October.
Fueling the growth in offshore demand for mutton during October has been increased flows to the USA and China.
Since June, average monthly exports of Australian mutton to the USA have been 137pc above the five-year average level and Chinese flows have been 82pc higher (Figure 3).
During the June to October period, the combined USA and Chinese mutton shipments accounted for about 50pc of the flow of mutton out of Australia, so growth in demand from these two destinations is significant.
Abnormally dry conditions this season have seen mutton slaughter running at elevated levels since the middle of the year as producers try to manage stock numbers.
What does it mean?
Normally such an increase to the supply of sheep being turned off would be expected to act as a headwind on price.
However, it appears the surging demand out of the USA and China has been a counterweight to the higher supply.
Since the start of July 2018, mutton prices have been averaging 11.5pc higher than during the 2017 season, despite having 43pc higher weekly slaughter volumes than last year.