Lamb retail prices are expected to rise this year as farmers keep animals back from slaughter to build up their herds, according to Meat and Livestock Australia (MLA).
Prices are already at a record high, at 614c/kg for trade lambs (weighing between 18kg and 22kgs), up from 557c/kg last year. Farmers are taking advantage of the strong market to send fewer sheep to slaughter.
According to the latest MLA and Australian Wool Innovation survey, 90% of respondents said they would maintain or increase their flock size this year.
MLA’s April update of sheep industry projections showed the number of lambs sent to slaughter in 2017 would be 21.7m, 2.7m fewer than last year.
Mutton slaughter was also predicted to fall 17% this year to its second lowest level on record, at 5.8m sheep.
MLA’s projections show the retention of flocks will push sheep numbers to 68m, up from 67.3m last year.
Ben Thomas, MLA’s manager of market information services, said the drop in production would keep prices buoyant for the remainder of 2017 but said producers should be cautiously optimistic about prices beyond 2017.
“Despite the buoyant market, there is a concern around the sustainability of the current price levels further up the supply chain with some recent temporary closures of processing capacity,” he said.
“The risk for producers is once the number of sheep and lambs available for processing do recover, and if processing capacity remains reduced, there is the potential for a greater correction in prices than otherwise would have been the case.”
Australians consume, on average, between 9kg and 9.5kg of lamb each year, and the MLA expects that figure to remain steady.
Neighbouring New Zealand, meanwhile, may need to consider reducing its livestock numbers by 35% to meet its climate change commitments. Emissions from agriculture account for almost half of New Zealand’s gross emissions, a higher proportion than in any other developed country.