The Australian sheep market certainly served up a smorgasbord of extremes this year.
Prices never seen before were paid for heavy lambs sold through the yards and mutton took on an entire new role filling a resurgent demand out of China.
Impacting the market and resulting in historically high prices was the classic supply-and-demand situation assisted by the continuing dry weather across a majority of the pronounced sheep-producing country particularly in the eastern states.
But strong demand in global markets has also assisted the higher prices and strong returns for Australian sheep producers, with per unit export value of lamb 23 per cent above the five year average.
One could almost say the year started with a bang when a fire ripped through Thomas Foods International in South Australia in the first week of January.
On a national scale the Murray Bridge plant kills 10-12 per cent of sheep and lambs so taking this capacity out of the system had a guaranteed impact on demand.
The first week of the lamb market was consumed by an influx of young lambs which rallied close to 20 cents higher.
But during the 12 months, trade and heavy weights have dominated the price rises, trading at a premium to the lighter weight categories, with fewer finished lambs available given the continuation of the poor season and cost of feeding.
The lamb benchmark trade lamb indicator began to rise strongly in April smashing through the 700 cents and 800 c/kg cwt for the first time, reaching 846c/kg in the last winter month.
It briefly rose above 900c/kg, but has since steadied around the 700c/kg mark – considerably higher than the same time last year.
It was a solid six-week run during the winter months where we witnessed those producers who were able to finish lambs, despite the dry conditions, be rewarded, with a run of records broken.
Wagga Wagga saleyards started and finished the trend kicking off by selling a pen of second-cross Poll Dorset lambs for $258.20 in June and eventually attracting $301.20 for an extra heavy pen of lambs at the start of August.
This price is expected to hold it’s place in the record books for a while.
Growth in the sheep saleyard prices has been more subdued, and the increased supply of lighter ewes over winter has resulted in discounted trading.
But despite the considerable supply increase, the national mutton indicator remained surprisingly strong averaging 437c/kg in August – 26pc above the five-year monthly average with China’s resurgent appetite playing a sizeable role.
It has only been in recent months that we have witnessed a dramatic change in premiums with November figures dropping 17c below this time last year.
Although there are some emerging risks to Australia’s sheepmeat markets, the limited global pool of high quality sheepmeat and the need for Australia to rebuild flocks when the current drought breaks should continue to underpin prices in the next few years.