Stable lamb production and a decline in mutton production is forecast for 2018 as producers maintain intentions to expand their flocks and high wool prices provide an incentive to retain Merino wethers. With added stock retention and an improvement in marking rates, the national sheep flock is forecast to expand a further 2.5% in 2018.
Lamb and sheep slaughter are both expected to drop slightly in 2018, to 22.5 million head and 7.2 million head, respectively. A small increase in lamb carcase weights will help offset the lower slaughter, resulting in stable lamb production at 514,000 tonnes carcase weight (cwt). It is a slightly different story for sheep, with carcase weights expected to ease from record highs in 2017 back towards their longer term trend. This, combined with declining slaughter, suggests a small reduction in mutton production to 177,000 tonnes cwt.
There are currently many positive signals across the sheep industry, with producers' continued intention for flock rebuild and enhanced breeding efficiency apparent in a number of industry surveys. The latest ABARES figures are showing good returns in farm cash income and industry reports strong ram sales across the board. Consumer demand for sheepmeat has been robust with lamb exports hitting record highs, mutton exports up 11% and reasonably flat domestic consumption despite average retail prices rising further in 2017. If the three-month rainfall outlook comes to fruition, with a decent autumn break, the industry will be well positioned for another strong year.
Looking ahead, it is expected that both lamb and mutton exports will continue to follow domestic production shifts. Exports are likely to plateau in 2018 before building up again in coming years.
The increase in both sheepmeat production and prices in 2017 highlights the strength of the market. Current market signals are showing no significant change to international demand in 2018 and with the anticipated softer overall sheepmeat production, this year should see continued support for prices.
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