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Insights March 2021

8 March 2021 |Sheep & lambs

Insights March 2021

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


  • Australian lamb prices are expected to remain well supported by strong restocker demand however an anticipated influx of heavy lambs could add downwards pressure to prices ahead of winter.
  • Mutton prices are expected to remain supported well above average by firm demand and very tight supply.
  • Tight supply will continue to constrain export volumes however consumer demand is expected to strengthen as major export markets continue to recover from the impacts of COVID-19.

Strong restocker demand has helped keep Australian lamb prices a very high level in February with the Eastern States Trade Lamb Indicator (ESTLI) operating within a range of 840-870c/kg during the month. The ESTLI is currently 10.5 per cent lower year-on-year, however that is compared to the record highs of March 2020. The Western Australian trade lamb indicator declined by 4.1 per cent in February under the weight of higher yardings and is currently at a 17 per cent discount to the ESTLI.

Eastern states lamb slaughter remained relatively tight in February with average weekly slaughter down 7.6 per cent on February 2020 and 11.7 per cent below the 10-year average for February. Average weekly yardings meanwhile lifted in February to be 7.2 per cent above February 2020 and 18.2 per cent above average. Good feed conditions in eastern Australia are allowing producers to feed lambs to heavier weights which is likely to result in an increase in supply in coming months as these lambs are turned off. The anticipated influx of heavy lambs would add downwards pressure to prices leading into winter.

Tight supply and strong demand for breeding stock helped drive the national mutton indicator price 6.5 per cent higher since the start of February. Current mutton prices are 7.3 per cent lower year-on-year but a very healthy 33.8 per cent above the five-year average.

Average weekly sheep slaughter increased by 37.5 per cent in February but remained very tight at 23.9 per cent below the 10-year average. Sheep supply is expected to remain very tight due to low flock numbers and producer intentions to retain stock for breeding. Ongoing tight supply as the flock rebuilds is expected to keep mutton prices well supported.

Tight supply of lamb and mutton will continue to constrain export volumes. The volume of lamb exports in January and February was 25.4 per cent lower than 2020 while mutton exports were even tighter with 35.2 per cent less mutton exported compared to 2020. Export pace to the Middle East remained very sluggish with lamb volumes down 46.6 per cent year-on-year and mutton less than half of 2020 volumes. Chinese demand was strong in February with the volume of mutton exports up 167.4 per cent year-on-year and lamb exports 48.1 per cent higher. While supply is expected to remain tight there is growing confidence for demand to strengthen, particularly in foodservice channels, as major export markets recover from the impacts of COVID-19 and the rollout of vaccines offer greater confidence to consumers.


Source: Meat and Livestock Australia

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