Australia: Sheep and lamb market in 2022
Prices started at extreme highs at the beginning of the year and have been coming back since then. Seasonal supply, buyer demand and quality have been key drivers for these pricing pressures.
Mutton has been in a steady decline since the middle of the year. The highest price was reached at the beginning of June at 651.44c/kg cwt when seasonal supply softened during joining. In the second half of the year, yardings increased but processors were prioritising the large supply of lambs hitting the market at that time. This dampened buyer competition and demand at the saleyards.
Export demand for mutton in key markets such as China have remained strong, increasing 2% and total mutton exports increasing 7% when compared to this time last year. Their ‘COVID 0’ policy could see some impact on the market in future, with softening demand in the foodservice industry – however, other emerging markets will be able to take on redirected product.
Heavy lamb prices have been recovering since their lowest point at the beginning of August when prices reached 657.37c/kg cwt. This is still far from the highs reached at the end of 2021. Heavy lambs have consistently traded at a premium on light lambs, with the new season, well-finished extra heavy lambs in strong demand from processors.
Some price pressures in WA can be attributed to the lack of labour available to processors in the west. This dampened demand from processors and further softening prices were encouraged by increases in supply.
Total yardings this year to date have been down 16% from last year in the same timeframe. Yardings fluctuated the most in April (due to seasonal joining) and July (after the foot-and-mouth disease outbreak in Indonesia occurred). Total yardings reached 11,057,644 head the week ending 9 December.
The largest monthly sheep and lamb yardings occurred in November at 1,370,230 head, following a period of wet weather at the end of October and the beginning of November, which prevented transport to saleyards in many key regions. Drier conditions lifted yardings to record highs, with producers trying to move stock before further rainfall rolled in.
NSW consistently had high yardings above monthly averages for the state. Total yardings to date in the state reached 6,317,697, which was still back 5% on the yardings in NSW last year. The spread of larger yardings was unseasonal this year, with high numbers throughout. Wagga Wagga hit record weekly numbers in November, with 80,650 head yarded in one week.
Slaughter has seen some volatility throughout the year, with public holidays and wet conditions shortening processing weeks. Sheep slaughter had its seasonal low in the middle of the year where producers retained stock for joining. Some easing in numbers in key states such as NSW and Victoria was due to extreme wet weather.
Lamb slaughter maintained its numbers with the highest rate occurring in June at 412,570 for that week, whereas numbers were 7% at that time in 2021. The ability for smaller stock to be taken up when regional issues, such as flooding or state public holidays, occurred has allowed lamb numbers to remain firm. Good over-the-hooks prices also helped lamb slaughter, as the better prices caused processors to prioritise lamb slaughter.
The second half of 2022 has seen some accessibility issues, with extremely wet conditions blocking off roads and preventing producers from getting into the paddock to transport any livestock. Although these headwinds have been challenging, intentions to grow flock sizes are still strong, with favourable conditions forecast for 2023.
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