Bullish on lamb

Updated sheep industry projections from Meat & Livestock Australia (MLA) allow us to re-calculate our National Trade Lamb Indicator (NTLI) fair value model for annual average forecast prices. Looking back, the 2023 model was too optimistic in its forecast. Looking forward, 2025-6 should bring higher prices.

In 2023 the model predicted fair value range to be between 576c/kg to 766c/kg cwt and over the year the NTLI ranged between a low of 411 cents and a high of 812 cents.

As an annual average figure the model suggested 671 cents was the fair value average for 2023 and the actual average for the year came in at 587 cents, so the model was about 14% too optimistic.

Looking to 2024 the model suggests an annual average of 672c/kg cwt, so it is broadly expecting this year to be fairly similar in pricing to 2023 based on current projections for lamb slaughter, flock numbers, export demand levels and the AUD/USD value.

In terms of a fair value range for 2024 the model predicts a range of 574c/kg to 769 c/kg.

For 2025 the model suggests an annual average NLTI of 780c/kg cwt with a fair value range of 668 cents to 894 cents.

In 2026 the model places the annual average NTLI at 822c/kg cwt with a range of 703 cents to 942 cents.

Bear in mind that all of the forecasts and ranges outlined here are based on current model inputs which can be subject to change and this means the forecasts can be revised in light of any updated model inputs.

Another aspect to take into account for the longer-term projections is that the model assumes a normal rainfall pattern.

A move to significant dry periods in either 2025 or 2026 could see the model forecasts revised downwards.