Aussie lamb prices expected to rise in coming weeks following spike in saleyard sheep prices

Aussie lamb prices expected to rise in coming weeks following spike in saleyard sheep prices

The price of lamb could be set to rise on supermarket shelves following a dramatic spike in saleyard sheep prices in the first two weeks of 2024.

Key points:

  • Saleyard lamb prices in Victoria have increased by up to $50 per animal as the 2024 market opens
  • Farmers and wholesalers are surprised by the price jump after last year’s low prices
  • Supermarkets are expected to pass the increasing costs onto customers

Western Victorian sheep farmer and butcher at Midwest Meats in Colac, Justin Cashman, said he was surprised by the sudden jump in saleyard prices.

“Nobody saw prices jumping this quickly,” he said.

“I certainly didn’t. That’s from a farmer and a meat wholesalers point of view.

“Prices have jumped significantly, particularly in the last two weeks.”

On Tuesday in the Ballarat saleyards, prices were $30 to $50 stronger per lamb on average compared to the final sale of 2023.

This was also reflected last week in Hamilton where there was a lift of $30 to $40 per head more than at the final sale before the Christmas break. 

In New South Wales, Wagga returned similar results — up $25 to $40 per lamb on average.

Sharp rise from spring prices

This was in stark contrast to the spring season, where prices plummeted as the market became saturated with farmers off-loading stock.

There was anger from both farmers and consumers for months, as the lower prices failed to be reflected on supermarket shelves.

The price of lamb is spiking as the 2024 market kicks off.(Supplied: Meat and Livestock Australia)

The government on Wednesday threatened to pull “all levers” to ensure supermarkets passed on cost savings, as part of a Food and Grocery Code of Conduct Review that was due to be completed by the end of the financial year.

Federal Agriculture Minister Murray Watt said farmers had not been receiving good prices and there had been huge mark-ups by supermarkets.

“We have seen in response to some of [the scrutiny], some action from supermarkets to drop some of their prices, particularly for things like sheep meat.”

Passing on costs

A leg of lamb is currently $8 per kilo in both of Australia’s major supermarkets, while chops are retailing at $12.50.

These prices are likely to increase as the price of sheep climbs.

“I don’t know how much longer people are going to be able to sustain the prices we’re currently paying, whether it be wholesalers or supermarkets,” Mr Cashman said.

“Prices are certainly going to have to go up. At this rate [saleyard prices] have virtually gone up 30 per cent in the last month.

“Processors and wholesalers don’t work on those sorts of margins.”

Coles was criticised in 2023 for delays in reducing its lamb prices on supermarket shelves.(ABC Rural: Jane McNaughton)

Mr Cashman said the saleyard prices were welcomed by farmers but consumers would likely be disappointed if shelf prices increased.

“As a sheep producer it is fantastic, and it’s come at a good time too,” he said.

“We’ve all got a bit of extra grass around and we’ve all had rain. It’s widespread.

“But it’s inevitable that we’ll need to put prices up [in the butcher] at some stage, otherwise you simply go broke.”

The Australia Day effect

Episode 3 market analyst and director Matt Dalgleish said he was optimistic about the lamb market for 2024.

“The retail players are quite active. They look like they’re getting prepared for Australia day,” he said.

“Generally at this time of year we do see a bit of an increase, and the marketing program that Meat and Livestock Australia (MLA) do in the lead up to Australia Day has been quite successful.

“The last few years we did get increased consumer demand and that flows on to demand at the saleyard.”

Market analyst Matt Dalgleish said lamb prices were spiking after processors slowed down for Christmas.(Supplied: Matt Dagleish)

Mr Dalgleish said the strong weather season was also a contributing factor to increased prices.

“We’ve had this El Niño forecast that has been breaking down, so the big thing will be if that reforms as we progress through 2024,” he said.

“If we go to a much more normal season of rainfall then I think we’re gonna have a pretty good season in regards to pricing and see pricing continue to increase as we head into the middle of the year.”

A strong demand

Mr Cashman said there had been a shortage of lamb available for retailers to sell to the public over the December and January period, which had contributed to the price spike.

“It’s been hard, particularly in food services, to get extra cuts of lamb,” he said.

“We’re buying daily from some of the larger processors in Victoria and we’re finding it hard to keep orders full.

“We’re finding it hard just to keep orders full and I guess that’s pushing these prices.”

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