Sheep meat prices remain under pressure as lamb production soars, with the chances of a winter price rebound now slim.
Indicators have generally continued to ease with mutton and light lamb both recording improvements week-on-week, 6c to 245c/kg and 3c to 340c/kg respectively.
Australia produced the most lamb on record in the calendar year 2022 and production is tracking 7.7 per cent above year-on-year levels for 2023, according to Australian Bureau of Statistics data.
This quarter has also seen lamb production records broken, with 149,385 tonnes being produced in Australia, 4pc more than the previous record set in June 2018.
Mutton production is also up, with sheep slaughter for the quarter at 2,550,700 head - the highest in nearly four years.
Episode 3 market analyst Matt Dalgleish said the recently released figures confirm how strong the season has been in terms of numbers.
"Processors are recovering from Covid-19 and accessing more labour but if we move towards dried conditions and supply remains strong it will keep a bit of a lid on pricing," he said.
"It's looking like we won't see a price recovery this winter... it's been a very peculiar season.
"The overall flock size has gone in the last few years from about about 60 million to now nearly 80 million.
"Lamb exports have been pretty strong, we would normally see some easing in June and July because of high prices but because we haven't seen those eventuate demand has remained strong all winter."
According to MLA market information manager Stephen Bignell, nearly five million sheep have been processed so far this year.
"This is an extra 2,024,800 compared to the same point in 2022, equating to an additional mutton throughput of 68pc year-on-year," he said.
"Victoria is contributing the most to the big jump in mutton slaughter, with Victorian processors working through a million sheep so far this year."
Lamb and sheep proceeds were above Q1 2023 levels and the same as March 2021.
The gross value of sheep and lambs slaughtered increased 1.9pc to $1.2 billion.
In financial year 2023, lamb and sheep farmers made $4.8b for the sale of animals to processors.
It comes as the deflationary pressures finally begin to show at a retail level, with Woolworths this week slashing lamb leg roast to $10/kg, the lowest price offered by the retailer since August 2018.
Coles is also gearing up for an abundance of spring lamb on offer to supply into its grass-fed lamb range, GRAZE lamb.
"We expect to see excellent quality spring lamb in the market this year with strong volumes already being seen which will enable us to provide customers with great value when it comes to various products across our lamb range," a Coles spokeswoman said.