Key points

• Lamb prices follow a generally seasonal pattern, rising early in the year before declining in spring as spring lamb supply becomes available. Nonetheless, monthly average trade lamb prices generally performed towards the upper end of the five year range in 2014-15 and have remained reasonably steady through July and into August this year. Prices are now well ahead of the same time last year. While we still expect that prices will come off as supply comes online in the spring, our overall forecast is that prices will increase moderately on average in 2015-16 – up 1.2% (AUD) for the period.

• We are still around a month away from the major spring flush of lambs. Our forecast for a 1.0% decline in lamb production in 2015-16 is in line with ABARES’ estimate. Turnoff rates have been increasing over a number of years, which we see as ultimately unsustainable. There is a risk that dryness in Northern Victoria this season could see destocking and flock dispersal ahead of summer. Looking beyond the coming season, if breeding ewes continue to be slaughtered at elevated levels it will become harder to maintain lamb production levels.

• Export volumes of processed lamb remain strong however live sheep export volumes have contracted significantly since early 200o’s.

For further analysis download the full report.

• In focus – Lamb Market Update August 2015 (PDF, 1MB)