Lamb supply is expected to tighten toward the end of spring, with the number of spring lambs sold in 2014–15 forecast to fall compared to the same period a year ago.

ABARES’ September quarter Agricultural Commodities Report said Australian lamb and mutton prices are forecast to increase in 2014–15, with continuing strong demand from major export markets.

Upward pressure on lamb prices predicted

ABARES commodity analyst Robert Leith said the strong export demand and tighter lamb supply is expected to place upward pressure on prices.

“The Australian weighted average saleyard price of lamb is forecast to increase by around 7 per cent in 2014–15 to around 510 cents a kilogram.

“The weighted average saleyard price for sheep is forecast to increase by around 15 per cent in 2014–15 to 300 cents a kilogram,” he said.

The sheep price forecast comes after a 40 per cent increase in 2013–14, resulting from strong demand for mutton in Asia.

“This demand absorbed increased supply caused by adverse seasonal conditions in many major producing regions.

“The forecast price increase in 2014–15 reflects an assumption that improved seasonal conditions will lead to lower production while export demand remains strong,” Mr Leith said.

The higher number of sheep slaughtered in the previous two seasons is estimated to have resulted in a smaller breeding flock.

Mutton demand to be strong in 2014-15

Mr Leith said export demand for sheep meat is expected to be strong in 2014–15, following a record year for lamb exports and considerable growth in mutton exports in 2013–14.

Australia exported a record 226 000 tonnes of lamb in 2013–14 as shipments increased to China, the Middle East and the United States.

Lamb exports expected to fall

Australia exported a record 226, 000 tonnes of lamb in 2013–14 as shipments increased to China, the Middle East and the United States.

Following a record volume exported in 2013–14, ABARES expects lamb exports to fall by 4pc in 2014–15 to around 216,000 tonnes.

“The forecast decline in exports represents a decrease in lamb supply, although strong demand from major export destinations is expected to continue.

“Reflecting this, the value of lamb exports is forecast to increase by 2pc to $1.5 billion. In 2013–14 the Middle East, China and the United States accounted for almost two-thirds of Australian lamb exports,” Mr Leith said.

Their share is forecast to grow in 2014–15.

Live exports shipments expected to lift

Mr Leith said live sheep exports are forecast to increase by around 9pc in 2014–15 to around 2.2 million head. The resumption of live sheep exports to Bahrain in April this year, lifted shipments by 11pc in the June quarter.

Source: ABARES