Mutton closing in on a low

Mutton closing in on a low

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FIGURE 1: Australian sheep slaughter. If we take the projection for 2019 slaughter, of 8 million head, subtract estimated January slaughter and divide the rest by historical seasonality we get monthly slaughter as shown above.

FIGURE 1: Australian sheep slaughter. If we take the projection for 2019 slaughter, of 8 million head, subtract estimated January slaughter and divide the rest by historical seasonality we get monthly slaughter as shown above.

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If we’re not seeing the low for mutton prices now, we’re not far off it, says Mecardo's Andrew Whitelaw.

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THE flock is expected to hit a new low by the end of June 2019.

MLA’s forecast for a flock of 65.23 represents a 3.6 per cent fall on 2018 and is a similar level below the previous 100 year low of 67.5 million head set in 2016.  

With a record low flock, surely a record low sheep slaughter?

Apparently not.

With the fast start to the year and continuing dry weather, MLA are not projecting 2019 to be the low for sheep slaughter as they are for lambs.

Sheep slaughter this year is expected to be down 16pc on 2018, with a further 10pc fall in 2020 to 7.2 million head.  

Despite the low flock, MLA are seeing the slaughter low of 7.2 million head is still 46pc above the low mark set in 2011 and 3pc above the 2016 low mark.

The flock did manage to grow 7pc in 2016-17, which suggests the flock is more fertile than in 2011, and a good season might see sheep slaughter around the 7 million head mark.

February to April slaughter should be down on last year, but not by much.  

If we are to reach the 8 million head target, sheep slaughter will have to well back on last year from May to December (Figure 1).   

What does it mean?

Over the medium and longer term, things look equally rosy for mutton markets.

MLA don’t expect sheep slaughter to get back above 8 million head until 2022.  

With a 9.5 million head slaughtered in 2018 mutton prices averaged 443¢/kg cwt.

If we’re not seeing the low for mutton prices now, we’re not far off it.

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