Sheep and lamb slaughter remained resilient in 2022, despite difficulties in the processor sector and logistical issues after wet weather events in several regions.
The industry reached peaks not seen for up to two years following consecutive seasons of flock rebuilding allowing for plentiful supply, according to ANZ analysts.
National lamb slaughter data shows over 400,000 lambs were processed each week in October, up almost 18 per cent on average on last year.
Strong lamb exports also helped to maintain lamb prices at profitable levels, however returns are well back on 2021 prices.
Seasonal supply, buyer demand and quality have been key drivers for these pricing pressures.
Mutton prices struggled to keep pace with the lamb price recovery seen throughout late spring, with very high supply in the market.
Mutton has been in a steady decline since the middle of the year.
According to MLA, the highest price for mutton was reached at the beginning of June at 651.44c/kg cwt when seasonal supply softened during joining.
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In the second half of the year, yardings increased but processors were prioritising the large supply of lambs hitting the market at that time.
This dampened buyer competition and demand at the saleyards.
High lamb and mutton supply is expected to continue over the summer months, contingent on weather interruptions.
This will keep pressure on prices.
Compared to this time last year, export demand for mutton in key markets such as China have remained strong, increasing two per cent and total mutton exports increasing seven per cent.
Though still far from the highs reached at the end of 2021, heavy lamb prices have been recovering since their lowest point at the beginning of August when prices reached 657.37c/kg cwt.
Heavy lambs have consistently traded at a premium on light lambs, with the new season, well-finished extra heavy lambs in strong demand from processors.
MLA reports that continued wet weather made for a challenging spring for many sheep producers, with logistical as well as animal health challenges arising from the ongoing rain events.
The unseasonable weather caused disruptions to shearing programs, heavy worm and fly burdens, increases in foot issues, wool damage and flooding impacting pasture availability.
Mutton throughput is tracking considerably higher than previous years, with close to 150,000 head processed in the last week of October, representing an over two and half year high and
demonstrating the strong position of the national flock, as surplus females find their way onto meat markets in numbers not seen since the drought induced destocking period throughout 2018/2019.
Fortunately for lamb markets, the consistently high supply in the market throughout spring has been matched with continuing strong export demand.
Although trading well below 2021 levels, and fluctuating regularly based on weekly supply, prices remain at a profitable level for producers, with the National Trade Lamb Indicator sitting in the mid 700 c/kg carcase weight (cwt) in late November.
This represents an approximate 150 c/kg cwt recovery since the large market drop seen in late July, early August, when prices found their way down to the low 600c/kg mark.
Producers able to finish lambs throughout late winter and the first two months of spring were rewarded by prices, with the spread between light and heavy lambs opening up to nearly 140 cents/ kg cwt, with an average 81 c/kg cwt premium for heavy lamb.
This is a direct contrast to the first six months of the year when heavy lambs were struggling to find price support as processing delays impacted through the supply chain.
Total yardings this year to date have been down 16 per cent from last year in the same timeframe, fluctuating most in April (due to seasonal joining) and July (after the foot-and-mouth disease outbreak in Indonesia occurred).
Total yardings reached 11,057,644 head the week ending 9 December.
Good over-the-hooks prices also helped numbers, as the better prices caused processors to prioritise lamb slaughter.
According to ABARES analysts, livestock prices are forecast to fall in 2022/23 due to increased supply, lower restocking demand, and a slowing global economy.
