Current State of the Australian Sheep Market
The Australian sheep industry has experienced a significant shift in 2023. The size of the sheep flock is the largest it’s been since 2007, a growth attributed to a focus on enhancing flock productivity and benefiting from three consecutive prosperous seasons.
However, this record flock size, along with forecasts of a challenging seasonal outlook for 2024, has led to record yardings in saleyards throughout 2023. As a result, there has been a notable easing in the sheep and lamb market over the years.
Mutton Prices and Market Trends
Weekly mutton prices have seen a dramatic decrease, dropping 76% from their 2023 peak at 439¢/kg carcass weight (cwt) in May, to 104¢/kg cwt in October. This week, the national mutton indicator is at 150¢/kg cwt, while the national trade lamb indicator has reached 634¢/kg cwt.
This creates a difference of 484¢/kg cwt, marking the second-largest nominal price gap since 2000. The only time the cent difference was higher was in January this year, when it reached 493¢/kg cwt. Considering the average carcase weight of 24.7kg, this week’s prices translate to a $120 difference per head.
While the nominal gap is significant, the percentage difference provides a more realistic understanding of the market’s state. The mutton indicator is currently 76% below the trade lamb indicator, a trend that has been consistent over the last three months, with the price difference ranging between 63–78%. Historically, since 2000, such a substantial difference of over 70% has only occurred twice.
Regional Differences: Focus on Western Australia
In Western Australia (WA), the gap between mutton and trade lamb prices has been even more pronounced, with an 85–86% difference observed in the past four weeks.
The WA mutton market has generally trended below the national indicator throughout 2023, with prices ranging from 3% to 64% lower than the national price. This month, WA recorded the largest weekly price difference compared to the national price since 2000.
The growing gap in WA has been driven by the mutton market’s decline in recent weeks. Entering the tenth week of prices below 100¢/kg cwt, the WA mutton price is currently at 65¢/kg cwt in the last week of saleyards, the lowest since November 2006, when prices were at 55¢/kg cwt.
2023 has been a pivotal year for the Australian sheep market, characterised by a historic flock size and significant fluctuations in prices.
The substantial gap between mutton and lamb prices reflects the changing dynamics of the market, with regional variations, especially in Western Australia, further accentuating these trends. As the industry moves forward, adapting to these evolving market conditions remains a key focus.
