News

High saleyard lamb and mutton prices forecast for 2021-22

Sheep Central, September 15, 2021

RISING lamb, mutton and wool prices are expected to contribute to a record-breaking year in Australia’s gross agricultural production in 2021-22.

ABARES’ Agricultural Commodities: September Quarter report is forecasting the nation’s agricultural gross value of production to reach $73 billion in 2021-22, with livestock commodity output to be worth an estimated $33.5 billion, up 8 percent.

ABARES economist Harry Coë said lamb and sheep saleyard prices are likely to remain high in 2021-22 and demand for lamb is expected to strengthen in the United States and the Middle East.

Chinese demand for mutton is expected to weaken due to greater availability of pork in China, while the sheep meat outlook in the United States remains positive.

Mr Coë said the national trade lamb saleyard price is forecast to remain high in 2021-22, rising by 1pc to 791 c/kg carcase weight. The national mutton saleyard price is forecast to fall by 2pc to 597 c/kg.

“In nominal terms, lamb prices in 2021-22 are expected to be the second highest ever recorded, while sheep prices are expected to be the third highest.”

Mr Coë said lamb prices are expected to rise slightly in 2021–22 following the economic recovery in Australia’s major markets, the US and the Middle East. However, mutton prices are expected to fall slightly due to weaker demand in China.

“Favourable seasonal conditions in the eastern states are expected to encourage graziers to continue rebuilding their flocks, rather than send their lambs and sheep to slaughter.

“Australian supply of lamb and mutton is therefore expected to remain subdued over 2021-22,” he said.

ABARES is forecasting the Australian sheep flock to grow to 68.2 million head by the end of 2021-22 and overall sheep meat production is expected to rise by 8pc to 680 kt.

“This is expected to be driven by increased slaughter and heavier slaughter weights, as favourable production conditions allow graziers to better feed their flock.

“In 2021-22, lamb slaughter is forecast to rise by 3pc to 20.8 million head, while sheep slaughter is forecast to rise by 13pc to 5.7 million head.”

Mr Coë said some of the lambs born during the first stage of the flock rebuild are expected to grow into adult sheep, leading to more adult sheep being available for slaughter in 2021-22.

“For this reason, sheep slaughter is expected to increase alongside lamb slaughter in 2021-22.”

Wool prices to lift 16pc in 2021-22

ABARES is forecasting the Australian Wool Exchange’s Eastern Market Indicator to average 1390c/kg clean for 2021-22, up by 16pc from 2020–21.

Government stimulus packages in major advanced economies have encouraged consumer spending and wool auction and export data show strong demand for fine and superfine wool in the first half of 2021, in preparation for the Northern Hemisphere winter, ABARES said. There are also indications that wool stocks have been drawn down, following a build-up during 2020 due to COVID-induced disruptions and uncertainty. Wet conditions across Australian growing regions will result in increased flock numbers, wool cut per head and overall supply, ABARES said.

Live sheep exports expected to lift 10pc

ABARES said in 2020–21, live sheep exports fell by 45pc to 602,000 head, but in 2021-22, live sheep exports are forecast to rise by 10pc to 662,000 head.

“The fall in live sheep exports in 2020–21 was partly due to tight supply in Western Australia.

“Western Australia exports most of Australia’s live sheep, but many sheep were sent to the eastern states to support the flock rebuild in 2020,” ABARES said.

“This meant fewer sheep were available for live export from Western Australia in 2020-21.”

Weak demand in the Middle East caused by the COVID-19 pandemic also contributed to the fall in live sheep exports in 2020–21. ABARES said substantial year-on-year declines in export numbers during months outside the prohibition on live sheep exports to the Northern Hemisphere suggest the prohibition had little effect on the decline in exports in 2020–21.

Will ag sector value exceed $70 billion?

ABARES executive director Dr Jared Greenville said if the forecast in the Agricultural Commodities: September Quarter report proves to be accurate, then it will be the first time the agriculture sector has been valued at over $70 billion.

“The value of crop production is set to rise by 7 percent to $39.5 billion because of another near-record winter crop harvest, combined with strong global prices for grain, sugar and cotton.

“While there are risks related to mice, labour availability and continued uncertainties due to COVID-19, we are expecting national production to remain robust,” he said.

“The value of livestock production is also tipped to rise to $33.5 billion, an increase of 8 per cent.

“We’ve had a solid cropping year across the wheat-sheep belt, so we’re looking at another robust harvest.”

Mr Greenville said the international grain market is also tipped in Australia’s favour, as poor harvests in North America and Europe are pushing up the price of grain.

“Strong domestic production and a favourable global market are set to see exports also hit a record of close to $55 billion in 2021-22.

“The biggest contribution to growth in exports will be crops, which are set to rise by 17 percent to $30 billion.”

The Agricultural Commodities: September Quarter report can be found at www.agriculture.gov.au/abares/research-topics/agricultural-outlook.

HAVE YOUR SAY

Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.

Comments

Get Sheep Central's news headlines emailed to you -
FREE!