Australian body reports positive outlook for sheep industry

By Chloe Ryan

- Last updated on GMT

The price potential for sheep and lamb could be capped this year, warned the MLA
The price potential for sheep and lamb could be capped this year, warned the MLA

Related tags Meat Domestic sheep Lamb Livestock

The sheep industry in Australia is set to continue to enjoy favourable market conditions, Meat & Livestock Australia (MLA) has forecast.

The industry body said sheep and lamb prices should remain strong over the coming years, due to tighter New Zealand production, continued global demand and a lower Australian dollar. 

However, the price potential for sheep and lamb could be capped this year, warned MLA manager of market information Ben Thomas, due to a high lamb slaughter rate and high-volume, but slowly moving markets in Australia and its two biggest export markets, China and the US.

This could soon ease though. "Offsetting the potential downward pressure on prices will be a slowdown in slaughter, which will happen if the three month rainfall outlook comes to fruition,"​ said Thomas.

Lamb slaughter for the first quarter has remained similar to last year. However, the final figure for the year is predicted to be 850,000 head lower, at 21.4 million head, with reduced supplies becoming more prevalent as the year progresses.

Mutton supplies, however, are tightening, following two very high slaughter years, said Thomas. "Mutton slaughter for the first quarter of this year is already back 20% year-on-year."​ The Australian sheep flock has been revised down to just below 70 million head, as a result of this high level of mutton slaughter over the past two years.

Australian exports for the first quarter were up 6% year-on-year, with the US (12.3t), China (8.7t) and the Middle East (16t) the largest markets, making up 63% of exports, while shipments to the EU were down 14% (3t).

"Going forward, while there are some indications in our largest markets that suggest prices could come under pressure in the coming months, from higher global stocks and high domestic slaughter, the long-term prospects for the sheep and lamb industry remain very positive,"​ Thomas added.

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