W21: Mutton & Lamb Update

Published May 30, 2023
W21: Mutton & Lamb Update

In W21 in the lamb and mutton landscape, the Australian 2021 industry survey indicates that Australian sheep producers are still docking their lamb tails too short, despite the practice being linked to flystrike, skin cancer, and arthritis prolapse. The survey outlines that among Australian producers surveyed, the average tail length for ewes was 2.5 palpable joints from the body and for wethers was slightly shorter at 2.4 joints. There is ample evidence that a medium-long or long tail, a tail docked at the third or fourth palpable joint, is better than a short tail. According to ABS, in Q1 2023, Australian sheep slaughter volumes rose by 54% YoY, the highest since Q4 2019, while production increased by 57% YoY. All Australian states except Queensland registered strong improvements in sheep production and slaughter numbers, with Victoria and WA (Western Australia) being the highlights. Australian sheep production saw a strong uptick as a result of the robust slaughter numbers. Also, Australian mutton production reached 58.66K MT, the highest volume since Q4 2019. Due to the genetically superior flock and sheep carcass weights at historically elevated levels, NSW (New South Wales) mutton production reached its highest level since Q4 2006, when 101M sheep were in Australia and 13.1M heads of mutton were processed in 2006. Furthermore, Australian lamb production reached 137.58K MT. All states except NSW and Queensland saw favorable lifts YoY, with Victoria accounting for 66% of the total lift in lamb production. The traditionally smaller production states of WA and SA (South Australia) registered solid upticks in production volumes. Overall, most states saw increases above 10% in lamb slaughter except NSW, with its volumes remaining firm YoY.

In W21, Australian lamb and sheep slaughter increased to 434.46K and 180.51K heads, respectively. Elevated slaughter and filled contracts at the processors are reducing the need to supplement numbers at the sale-yards, reflected at large sales such as Wagga Wagga sheep. Good quality stock are still fetching a premium price on plainer types. Australian trade lamb prices eased USD 0.06 WoW, further demonstrating the easing demand from booked-out processors. This indicator reached USD 6.34/kg carcass weight (cwt). Prices at Ballarat eased but remain at a premium on the national average at USD 6.77/kg cwt. Numbers through the indicator raised nearly 12K heads as supply continues to hit the market. Wagga Wagga saw a lift in sheep numbers by 5K heads, while lamb numbers held firm. Buyers were selective with trade and heavy lambs, with mixed quality of stock leading to softer prices overall. In New Zealand, the store lamb market has been kept afloat by plenty of grass across both North and South islands in autumn 2023. Although lamb schedule prices are softer compared to the highs of 2022 due to production costs, pricing is still well above five-year averages. New Zealand’s sheep meat export volumes in March 2023 advanced by 30% MoM and 12% YoY, while the average value increased by USD 0.024 from February 2023 to USD 5.48/kg FOB. While the lift in export earnings is trending in the right direction, the average export value for March was still USD 1.17 behind YoY. The lift in export earnings was predominantly underpinned by growing demand from China, with exports lifting 31% MoM and 51% YoY. The ongoing recovery of the Chinese economy will be pivotal to bolstering farmgate prices in New Zealand. RaboResearch anticipates that lamb and mutton schedules will continue to track upward through autumn 2023, as the food service sector recovers in China.

In the UK, performance recording is accelerating genetic progress and output in a Welsh hill flock, with gains being made at the top end filtering through the entire flock of pedigree and commercial animals. The pure-bred Welsh flock is now largely made up of ewes with an Estimated Breeding Value (EBV) in the top 25% for their breed on performance. Improvements in milk production and early lamb growth rates have led to an increase in eight-week weight, an early indicator of lamb performance linked to both lamb survival and eventual lamb sale weights. In the past seven years, there has been a 3.2kg increase in eight-week-old lamb weights, a 2.9mm increase in muscle depth at scanning, and a 5.9kg increase in scanning weights. While there are often YoY fluctuations, as with any hill farm, the rolling averages show a significant increase in the weight of both single and twin-reared lambs. These increases have seen eight-week weights for single-producing ewes rise to 22.8kg and total lamb weight produced for ewes-rearing twins rise to 35.9kg/ewe. Scan weight output per ewe taken at 20 weeks had increased by 2021 to 33.6kg for singles and 58.9kg for twins, from ewes with a 48kg mature weight. Single ewes are weaning 70% of their mature body weight and twins 122% without creep and only minimal concentrates for twin-bearing ewes. Lastly, DAFM reports that the Irish spring lamb supply so far in 2023 has fallen by 25% YoY. Meanwhile, the Irish hogget supply is up by 5% YoY due to a larger carryover of the 2022 crop of lambs. The overall Irish sheep kill is up by just over 28K heads, an increase of 3% YTD and trade is remaining fairly positive overall from a price perspective. 

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