LAMBS rounded out 2011 on a strong note after a year of price volatility, but 2012 holds hopes for more consistency as well as an increase in national production.
According to Meat and Livestock Australia (MLA), national lamb prices finished 2011 well, with wet conditions and tight supplies underpinning the market leading into the Christmas break.
Both lamb and mutton prices averaged higher across all major saleyard categories for 2011, with the above average seasonal conditions keeping turnoff rates constrained and producers firmly entrenched in rebuilding mode.
Prices across all of MLA’s National Livestock Reporting Service (NLRS) major categories ended 2011 on average eight to 16 per cent higher year-on-year.
While the average was higher, it was still a year of uncertainty.
Elders Goulburn livestock agent and branch manager Steve Ridley said the lamb market had been up and down.
"We’ve seen the lamb market hit some real highs but also some terrible lows in 2011," Mr Ridley said.
He said there were hopes for a more stable market in 2012.
"The lamb market, as it is, is making between $5 a kilogram and $5.50/kg.
"If prices stay at those levels it will probably be a bit more sustainable. I don’t think that too many people would complain about that; when you have prices going up and down (like they did in 2011) then it is no good for anybody."
He said skins had played a role in some of the price volatility in 2011.
"At the time of some of those really high prices skins were also very expensive."
He said when lambs were at their peak last year skins were making between $33 and $35, whereas at the end of 2011 they were back down to between $16 and $18.
"Sheep again have been very up and down; we had wethers make from between $140 to $150, and we hadn’t seen that before," he said.
"Mutton was also making about $4.50/kg. That was driven by the lack of supply and the demand for it."
The outlook for the lamb market in 2012 appears encouraging.
Australian lamb production is forecast to increase nine per cent year-on-year during 2011-2012, to 427,100 tonnes (cwt), according to the Agricultural Commodities report released in December by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).
An 11pc rise in the number of lambs slaughtered to 19.8 million head is anticipated, with more ewes in the flock, more lambs on the ground and attractive saleyard prices contributing to the higher turnoff.
ABARES expects lamb prices at the saleyard to average 540 cents a kilogram (cwt) during 2011-2012, a 1pc decline on 2010-2011, with the increase in production anticipated to be met by strong demand in overseas markets.
Total Australian lamb exports are forecast to grow 13pc to a record 177,000 tonnes, with a corresponding 12pc increase in value to $1.1 billion.
Lamb shipments to Australia’s major export markets - the US, Middle East, China and South East Asia - are all expected to expand in 2011-2012.
Mutton production, in contrast, was forecast to decline 7pc to 115,000 tonnes (cwt), as continued restocking activity restricts the availability of sheep for slaughter.
Sheep slaughter is expected to fall a further 6pc to five million head.
The upside to this decline in sheep slaughter is a continued rebuilding of the national flock, rising 5pc in 2011-2012 to 78 million head.
Sheep prices are forecast to rise 3pc to 425c/kg cwt, with tight supplies combining with fierce competition for sheep.
With mutton production forecast to be lower, shipments are expected to follow suit, declining 6pc, to 81,000 tonnes.
Australian live sheep exports are forecast to fall a further 4pc, to 2.8 million head, with strong competition for a tight supply of suitable sheep expected to restrict the number available for the trade.
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