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Nearly a record for mutton

The rainfall was better than expected, but the impact on price was about right.  This week east coast rainfall saw lamb prices move back to a one month high, while mutton jumped to what is very nearly a new record.  In the west prices corrected, but remain at the stronger end of the scale.

The main mover this week in sheep and lamb markets was mutton. The widespread rainfall across all east coast major price lamb areas saw supply fail to pick up, following a public holiday disruption last week.  Figure 1 shows mutton yardings on the east coast actually fell.

With producers holding onto sheep, mutton yardings their lowest full week level since November, and improving demand saw prices jump.  The National Mutton Indicator rally 38¢ to hit a new 6 year high of 450¢/kg cwt (figure 2), just 22¢ off the record reached in March 2011.

Lamb prices also rallied, but not by the same extent.  The Eastern States Trade Lamb Indicator (ESTLI) gained 10¢ to hit 632¢/kg cwt, a four week high.  Interestingly, this week was the third most expensive week for lambs this year (figure 3).

In the west trade lamb prices fell 26¢, to now sit below the ESTLI at 619¢.  Mutton prices in the west are, however, the most expensive in the country, at 469¢/kg cwt.  They were marginally more expensive two weeks ago, and for a week in 2011, but there has rarely been a better time to sell sheep in the west.

The week ahead

Tight supply continues to support sheep and lamb markets, and with rain this week, there is unlikely to be a lot of pressure to sell, with high prices the only thing that might keep supply flowing.

There could even be a rally towards 700¢ as we move towards winter, with everything lining up for sheep producers at the moment.