Key points:
- The national mutton indicator and the national trade lamb indicator reached a disparity of 484¢/kg, the second largest nominal price difference on current records.
- Saleyards are showing a trade lamb to mutton difference of over 70% most weeks since September 2023.
- Mutton prices in WA remain below national indicator prices, with never-before-seen discounts of over 85% to trade lamb.
The Australian sheep flock is the largest it has been since 2007, this is attributed to a focus on flock productivity and coming off three prosperous seasons. This record flock size, combined with announcements of a poor seasonal outlook in 2024 has resulted in record yardings through saleyards in 2023. This has caused the sheep and lamb market to ease significantly over the year. Weekly mutton prices eased 76% from their 2023 peak at 439¢/kg carcase weight (cwt) in May, to 104¢/kg cwt in October.
This week, the national mutton indicator came in at 150¢/kg cwt and the national trade lamb indicator reached 634¢/kg cwt, a difference of 484¢/kg cwt, the second largest nominal price difference on current records since 2000. The only other time the cent figure difference has been this high was in January this year when the split reached 493¢/kg cwt. With the average carcase weight at 24.7kg, this week’s prices equate to a $120 difference in head terms.
While the nominal difference is interesting to observe, the percentage difference provides a more realistic understanding of the intensity of the discount and its comparison to previous trends. This week, the mutton indicator was 76% below the trade lamb indicator. This is not a record figure, though has been a trend over the last three months. Since mid-September, the price difference has sat between 63–78%. When looking back to 2000, successive weeks of a difference greater than 70% has only occurred twice before. For 14 weeks in 2006, the difference settled between 73% and 84% caused by high supply, and low rainfall across the east coast, and the first three months of 2000 where the difference didn’t drop below 71%.
Looking to the west coast divide between mutton and trade lamb, saleyards in WA have had an 85–86% difference over the past four weeks. On mutton, the Western Australian indicator trends below the national indicator. Over 2023, WA mutton prices have ranged between 3% to 64%, below the national price. Sales this month in WA have had the greatest weekly price difference to the national price since 2000.
This growing gap has been driven by the WA mutton market easing in the last weeks of 2023. Coming into the tenth week of below 100¢/kg cwt, the WA mutton price is at 65¢/kg cwt in the last week of saleyards. This is the lowest it has been since November 2006 when prices reached 55¢/kg cwt.
Attribute to: Erin Lukey, Senior Market Information Analyst
