2024 capped a strong year for the lamb market, and reaffirmed Australia’s position as the key cog in global lamb supply.
Looking back to look forwards suggests higher supplies of lambs traded or retained over the 2024-25 summer will pressure heavy lamb prices in the first half of 2025.
MLA’s 2023 October SPIS survey results mirrored the 2024 October numbers, giving further evidence for the market to expect big numbers of lambs marketed.
One would have to say, 2024 offered the lamb industry something that resembles “normalcy”, if that’s a word which can be applied to livestock markets anymore.
In short, 2024 has seen record lamb slaughter, record production and subsequently record lamb exports, making Australia well and truly the largest and most important cog in the global lamb export/import market.
Evidently, processors managed to maintain throughput pace with the largest supplies of lamb Australia has produced, while globally the demand for our product remained strong. Fundamentally, couple that with an acute shortage of heavy and trade lamb supply and you’re given the reasoning behind why we saw in the spring flush, countercyclically, finished lamb prices reached two to three-year highs.
The all-important supply and demand balance was met in 2024, particularly in the second half of the year. Which provides us a unique snapshot of what I believe we’ll see occur again in 2025.
In this column in late December, I spoke of my expectation that based upon MLA’s Sheep Producer Intentions Survey (SPIS), we’d see large lamb supplies in the first half of 2025.
When we look at the first half of last year, lamb prices generally remained pressured, higher supply (albeit volatile), particularly for finished lambs kept a lid on prices.
Compare that with the second half of 2024, where supply weakened, the market experienced the usual mid-late winter price peak, before subsiding against more numbers and then recovered at a gallop to end 2024 with prices at two to three-year highs.
A lot of lambs were held back or sold back to the paddock in late 2024 and the SPIS survey supports this dynamic, a lack of weight in lambs or lack of feed available forced either the producer to sell to another restocker or lambs were retained on stubbles and failed crops to add weight before being sold in the first half of 2025.
These lambs will hit the market in the first half of 2025, which indicates to me we’ll see large supplies of finished lambs come forwards, which were retained last year during the spring flush when they’d normally be marketed. Specifically looking at heavy and trade lambs, these prices stand to deal with the most price pressure as there’ll be more supply available. The way the 2024 market performed and the dynamics which forced higher supplies to be sold following the 2023 spring flush remain in the 2024-25 market.
Figure 1.
The chart above (Figure 1), shows the relationship between heavy lamb prices and the weekly lamb slaughter rates in 2024, reported by MLA’s NLRS. The first half of the year saw lamb prices bottom out in March, higher supplies of lambs (most of which were held back following dry conditions and the market crash of 2023) were sold in the first half of the year, with these record setting slaughter rates, heavy lamb prices remained under significant pressure until late July when heavy lamb supply became tight and the market reacted accordingly.
In the second half of the year, slaughter rates subsided from their strong rates set in the first half of the year, and as a result the heavy lamb price continued to be supported due to tighter supply.
I expect the same dynamic to occur in 2025, with the heavy lamb price to operate in similar fashion for the first half of this year due to those lambs traded over summer being sold and the lambs held back by producers to add weight before being marketed.
Ripley Atkinson's experience in the red meat industry and current role at StoneX developing price risk management tools for Australia’s sheep and cattle sectors ensures he delivers unique, whole of supply chain insights and analysis across key factors such as prices, supply, production and the drivers of the sheep and cattle cycles.
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