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Insights February 2021

8 February 2021 |Sheep & lambs

Insights February 2021

8 February 2021 |Sheep & lambs
The February update provides an analysis of production and pricing trends for Australian sheep producers.


  • Australian lamb and mutton prices are expected to remain well supported after trending higher to start the new year.
  • Favourable seasonal conditions in south-eastern Australia are driving strong restocker demand and keeping supply tight by allowing producers to retain breeding stock and feed lambs to heavier.
  • Consumer demand is expected to continue recovering on the back of improvements in foodservice channels and economic sentiment which will add further support to lamb and mutton prices.

A combination of strong demand and below average supply is expected to keep Australian lamb and mutton prices well supported at a high level in the short-term following a strong start to 2021. The Eastern States Trade Lamb Indicator (ESTLI) opened the new year 11 per cent higher than the final price in 2020 and is currently 4.8 per cent higher year-on-year. Similarly, the national mutton indicator jumped 10 per cent to start the new year and is now up 4.6 per cent on the same time last year.

Lamb supply is expected to remain below average, following a slow start to the year. Average weekly lamb slaughter in January was 20 per cent below the 10-year average for January while yardings were down 11 per cent compared to average. Good rainfall in south-eastern Australia and a favourable outlook has allowed many producers to retain more ewe lambs than usual to rebuild breeding stock numbers, and feed lambs to heavier weights with very little pressure to sell. While holding lambs to heavier weights could keep supply tight in the short-term, it would likely also result in an influx of heavier lambs being turned off in coming months.

Sheep supply is expected to remain even tighter than lamb on the back of a depleted national flock and seasonal conditions allowing producers to continue retaining breeding stock for rebuilding flocks, continuing the trend from 2020. Average weekly sheep slaughter in January was 35 per cent below the 10-year average for January.

Restocker demand is expected to remain firm for both lambs and ewes, particularly in New South Wales and Victoria, as many producers will continue to seek additional stock for flock rebuilding or to utilise available feed. The strength of demand in eastern Australia, coupled with tight supplies is seeing ewes being transported over from Western Australia where conditions have been less favourable.

The outlook for consumer demand for Australian sheepmeat is positive due to expected recoveries in foodservice channels in both Australia and key export markets and improving economic confidence on the back of COVID-19 vaccines being distributed, although it may not be a smooth improvement. This bodes well for Australian lamb and mutton prices which proved to be very resilient amidst the impacts of COVID-19 in 2020. The United States remained a strong export market in 2020 with the volume of both lamb and mutton exports increasing year-on-year, despite reduced Australian supply and challenges that arose from COVID-19. Demand from China was softer and exports to the Middle East struggled due to lower oil prices and a heavy reduction in travel through the region. A continued rebound in oil prices will be a key factor required to drive stronger demand from the Middle East in 2021.


Source: Meat and Livestock Australia

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