Lamb prices predicted to rise in winter as supply tightens

Simon Quilty of Global AgriTrends said that as supply tightens, prices will rise accordingly with trade lamb to reach as high as 850c.

"I think the weakness is really in March and April in the market... but I see the market for the next six to eight weeks going sideways and then to start to claw its way back up based on tightness," he said.

"We had 9.7 million head of lambs slaughtered last year, which is a liquidation stage in the flock and I'm of the opinion that the flock size has fallen and the availability of both mutton and lamb are going to fall this year.

"My thoughts are that we could see lamb prices lift by July, August to around 850c on trade lambs and we might even be lucky enough to get a spike to 950c."

But prices will ease again in the spring period as supply rises, Mr Quilty said.

"We might see prices come back about 8pc or 9pc when the supply comes on," he said.

Mr Quilty said in 2023 the volume of lamb consumed domestically increased to close to 273,447 metric tonnes.

"Since 2019, domestic lamb consumption is up 85 per cent," he said.

"We've got larger volumes going on the domestic market but also we've rebounded in terms of our percentage of export as well, up to 70pc.

"Basically there was excess lamb everywhere in 2023, we had large amounts going domestically as well as larger amounts going in exports."

But Mr Quilty said he wouldn't consider there is currently strong demand for sheepmeat, as the uplift had been driven by discounted prices.

"We've been a cheap seller, but we had to because we had large production," he said.

"Strong demand comes when you can increase volume and increase pricing at the same time."

Mr Quilty said North America would soon see seasonal improvement in the domestic lamb space, which he believed would flow on to imported lamb.

"We're looking for that Northern Hemisphere summer demand to come on and with that the belief that both domestic and imported lamb is going to improve based on the regular demand that occurs," he said.

"The pricing of lamb racks in America continue to be in reasonably good shape.

"The shoulders continue to be a bit of a challenge at this point in time and in terms of shank, both foreshank and hindshank are also challenging.

"The good news is we have seen an improvement in frozen legs in the US market, prices have picked up in the last two months."

In terms of mutton, Mr Quilty said it was harder to predict what might happen.

"Any increase in pricing in mutton could occur due to seasonal demand and lamb lifting, but it will be muted by our dependence on China and the frozen stocks continue to be at large levels in China," he said.