Rain has given sheep prices a record boost for producers. Has the bottom of the market been reached?

After months of falling prices, the sheep and lamb market got a much-needed boost this week, thanks to rain. 

After dipping to its lowest level since 2007, the National Mutton Indicator jumped more than 65 cents a kilogram carcass weight in a week, which according to Meat and Livestock Australia (MLA) is a record.

MLA market information manager Stephen Bignell said rain influenced markets throughout the week.

“We saw prices shoot up at Bendigo in Victoria at the start of the week, driven by the forecast of rain,” he said.

“Then at Wagga Wagga after the rain event, its average mutton price increased by $1.20 per kilo [carcass weight] to $2.59/kg [a rise of 86 per cent].

“So the mutton graph is looking very vertical and it shows the impact of rain.”

It should be noted the Labor Day public holiday on Monday meant there were no sales at yards such as Dubbo, which does have an impact on the MLA national indicators.

A clearer picture will emerge next week.

In the cattle market, prices improved only slightly compared to sheep and lambs.

The benchmark Eastern Young Cattle Indicator (EYCI) rose by 6 cents, which is the EYCI’s first weekly rise since mid-August.

Has the bottom of the sheep market been reached?

Producers will be hoping the bottom of the market has been reached for 2023 and it seems that could be the case for mutton.

But when it comes to lamb prices, there are many who feel there is more pain to come.

The spring flush is yet to hit top gear and when new season lamb numbers rise in Victoria around November, it is expected to put further pressure on prices.

Brett Hosking runs a mixed farming operation at Quambatook in Victoria and got 50mm of rain this week, which he said was a blessing for his crops.

But he said the dramatic rise in the mutton price had come a little late for his business. 

“The mutton job was doing it really tough and we sold our older stock a few weeks ago and have missed this boost,” he told Landline.

“We felt we’d stick with the plan and fortunately the wool market hasn’t copped quite as big a battering as the meat prices, but we’re feeling it.

“If you look at our returns this year compared to what they were 12 months ago, they have just been decimated, and it’s purely down to pricing and demand.”

Who is buying mutton?

About 95 per cent of Australian mutton is exported and the latest monthly data shows China continues to be the biggest customer, taking 66,547 tonnes so far this year.

Malaysia is the second-largest customer, followed by the US and then Saudi Arabia, which is quickly becoming a major buyer, importing 8,552 tonnes this year, which is up 81 per cent compared to the same period in 2022.

Meat analyst Matt Dalgleish from Episode3.net said mutton exports to Saudi Arabia in September were Australia’s largest monthly shipment of mutton to that market since February 2020.

“The sheep meat market in the Middle East is very price-sensitive and competitive, so the relatively cheaper Australian mutton seen this year has provided a boost to trade volumes,” he said.

“Australian mutton is significantly cheaper than this time last year, so it is probably unsurprising to see export volumes booming presently.”

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