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Insights February 2020

3 February 2020 |Sheep & lambs
Sheep

Insights February 2020

3 February 2020 |Sheep & lambs
The February update provides an analysis of production and pricing trends for Australian sheep producers.

Overview

  • Lamb and sheep supply to tighten as rainfall allows producers to retain stock.
  • Demand strengthening as re-stockers add to already competitive markets.
  • Prices for lamb and mutton to be well supported by tighter supply and stronger demand.

Lamb and sheep supply are expected to tighten as recent rainfall and a more optimistic outlook will give many producers in eastern states confidence to retain more stock.

While producer intentions to begin flock rebuilding are growing, follow up rainfall is still required to fully restore feed and water supplies. Higher prices may draw more lambs onto the market, but low flock numbers will temper
any attempts to lift supply in response.

Demand for lambs and sheep in saleyards could strengthen if follow up rain in February encourages more re-stocker activity in markets. This would add to the already strong competition amongst processors seeking to meet strong export demand, particularly from China.

The combination of tightening supply and strengthening demand will support high prices in eastern states, continuing the upwards trend which characterised both lamb and mutton markets in January.

National indicators increased for all lamb categories in January, with re-stocker lambs recording a significant lift of 22.5 per cent. Prices in Western Australia are likely to remain subdued after a lack of decent rainfall kept prices lower year-on-year in January.

The longer-term outlook for Australian lamb and sheep markets remains positive with lower supply compared to 2019 and robust export demand supporting higher prices.

    

Sources: Meat & Livestock Australia

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