Lamb and sheepmeat prices are predicted to remain strong in 2022, albeit a continued increase in supply.
According to industry experts it is the United States with their surging volumes and robust prices that will be a key driver in keeping figures at high levels at the Aussie saleyards.
Coupled with this, livestock producers, with the continuing bumper season delivered by La Nina, will see increased production, further boosting export demand as international markets recover.
Rabobank's senior analyst for animal protein Angus Gidley-Baird said ongoing consumer demand will offset any downward price pressure exerted by increased supply.
"With a larger lamb supply and ongoing consumer demand, we expect prices to be more consistent across the year with less seasonal variation," Mr Gidley-Baird said.
"We predict trade lamb prices to average just above 800 cents per kilogram caracse weight (cwt) for the year."
He said healthy global demand will supplement the domestic market to keep lamb prices high.
"The strength of the US market has been the shining light," Mr Gidley-Baird said.
"They have increased their share of Australian lamb exports from 21pc in 2019 to 27pc in 2021 with volumes jumping 16pc in 2021.
"Import prices for chilled lamb were 53pc higher at the end of 2021 compared to December 2020."
And in January demand for Aussie lamb from the US was 35pc higher than levels seen in January 2021.
Chinese demand for Aussie lamb was 29pc higher than the volumes seen last year, but remain 30pc below the average levels for January according to the five-year average trend.
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Meanwhile, favourable seasons and producer restocking ambitions, together with solid global demand should also see mutton prices firm throughout the year.
Last year it was the export market that soaked up the seasonal peak of mutton supply and experts are predicting a similar scenario.
According to a recent report from Mecardo, export demand for mutton will to strengthen, despite having been impacted by Covid-19 driven freight and demand restraints in key markets in the Middle East.
On the domestic front, how long slaughter capacity and therefore processor buying activity will remain subdued is unknown, but with the Omicron peak passed, it's anticipated the issue should lessen in the weeks ahead.
Mr Gidley-Baird said with increased sheep numbers and a good season to support lambing rates, lamb slaughter should increase throughout 2022.
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