There are positive signals for sheep and lamb producers in 2018.

Good signals for sheepmeat prices

SHEEP producers are set for another profitable year, according to Meat & Livestock Australia projections.

SHEEP producers are set for another profitable year, according to Meat & Livestock Australia projections.

Stable lamb production and a slight decline in mutton production is also forecast as producers continue to expand their flocks.

MLA’s market intelligence manager Scott Tolmie said that while lamb and sheep slaughter were both expected to drop slightly in 2018, to 22.5 million and 7.2m, respectively, carcaseweights will increase.

“We are forecasting a slight increase in lamb carcaseweights in 2018 which will help offset lower slaughter, resulting in a stable outlook for production at 514,000 tonnes cwt,” Mr Tolmie said.

“The story for mutton however is slightly different, with carcase weights expected to ease from the record highs of 2017. This, combined with declining slaughter, suggests we will see a small reduction in mutton production to 177,000t cwt.”

Mr Tolmie said the 2018 outlook for the Australian sheep industry was positive, with the increase in production and lift in prices recorded in 2017 underpinning the market’s current strength.

“With flat to declining production forecast this year, combined with strong, ongoing international demand, lamb and mutton prices should continue to see strong support this year,” Mr Tolmie said.

“Consumer demand for lamb has been strong, with exports hitting record highs in 2017 at 251,000t cwt as well as maintaining domestic consumption levels despite increases in average retail prices.

“While lamb exports are expected to draw back slightly in 2018 to 244,000t swt, this is still four per cent above the five-year average.

“Mutton exports are also likely to reduce as a result of decreasing slaughter flowing through to a decline in production. China, Malaysia and Saudi Arabia remain the major export markets for mutton, and together account for more than 40pc of Australian exports."

Mr Tolmie said that although 2018 should see a slight drop in overall sheepmeat production, it is forecast to rise again in 2019 as the national flock grows. Lamb carcaseweights for the year are expected to average about 22.9 kilograms, continuing the upward trajectory of the last 10 years.

“This continued growth in carcase weight reflects the long-term trends around dual-purpose breeding, improved genetics and livestock management within the Australian sheep flock, as well as the fact that several major processors are maintaining fairly wide grid ‘sweet spots’,” Mr Tolmie said.

“Producers have been encouraged to grow their lambs and sheep out to heavier weights to capitalise on these bigger returns.

“Overall, there is a definitive theme around flock rebuilding in 2018. This, combined with the extraordinary run in wool prices recently, has led to the expectation that many producers will continue to retain more of their replacement ewes and Merino wethers, expanding the national flock a further 2.5pc."

If the Australian Bureau of Meteorology’s three-month rainfall outlook comes to fruition and the major sheep-producing regions receive a decent autumn break, the industry will be ideally placed for another strong year in 2018.

Would you like to comment on this article?
Thanks for providing feedback.