Sheep market review 2018
ENTERING 2018, many sheep producers were look to take advantage of strong meat and wool prices.
However, intentions soon went out the window as an extremely challenging year unfolded.
ciencies in south-east Australia, particularly droughtstricken NSW, led to elevated sheep slaughter, poor mark- ing rates and volatile lamb supply.
Fortunately, robust international demand and a falling Australian dollar supported Australian exports and, in turn, domestic saleyard prices.
In fact, some indicators rose to record heights, with many destinations around the world continuing to seek out Australia’s high quality sheepmeat products.
Lamb slaughter in 2018 experienced both record highs and recent lows as the market had one of its most volatile years on record.
After tracking near even with last year through the spiked in the second quarter of 2018 as dry conditions worsened and producers looked to destock.
Numbers peaked in May with the highest month of lamb slaughter on record.
However, weekly slaughter began falling rapidly during July, as drought conditions led to a nation-wide delay in the supply of new season lambs.
More recently, we have seen some increases in the quantity of new season lambs offered at saleyards in Victoria, however, those in NSW remain much more restricted.
of new season lambs corresponds with a general decline in carcase weights.
This was the case in 2018, however, the fall was more pronounced than usual, with unusually high numbers of lambs presenting for sale.
Sub-optimal pasture growth combined with the high cost of stock feeds were the driving factors behind this trend.
Lamb prices closely mirrored supply, experienc throughout 2018.
Records were broken in August, as the Eastern States Trade Lamb Indicator smashed through the 800¢/kg carcase weight (cwt) mark for between 650–800¢/kg cwt for the last four months.
achieving weight gains, a lambs began to develop during winter.
As such, heavy lambs began trading at a premium to trade and re-stocker categories on a ¢/kg basis in July, and have largely continued to do so since that time.
Since April last year, weekly sheep slaughter has tracked well above 2017 levels, as producers had few options but to
Despite strong wool prices, the lack of pasture and high feed costs forced many producers to reduce stocking rates and undertake heavy culling programs.
Mutton slaughter peaked in August/September, with some processors opting to maintain output by targeting sheep as opposed to compet ished lambs.
Sheep carcase weights also declined in-line with the poor season, running considerably lighter than last year and dip age in recent months.
For 2018, the national average sheep carcase weight is forecast to reach its lowest level since 2014.
Despite a considerable supply increase, the national mutton indicator has remained surprisingly strong so far in 2018.
As of early last month, the national mutton indicator sat 19¢ below year ago levels, however, it remained 103¢/kg cwt
Not all sheep indicators have performed so well.
The supply of lighter ewes winter and began trading at a discount.
The poor conditions that have marred 2018 will likely sheepmeat supply in 2019.
Poor marking rates com cull have raised concerns throughout the industry regarding lamb supply for the coming season.
Many producers will be desperate for some more consistent rainfall in the coming year, which would alleviate some of the cost pressures associated with high feed costs.
Longer term, a return to better conditions would also allow for some rebuilding of heavily