The mutton market opened the year with a bang before experiencing the same downward pressure as the remainder of the sheep sector. The past week it has found some stability, and most signs are pointing towards it being more likely to firm up and potentially rise throughout 2025, rather than experience much more downward pressure. As we learnt the hard way in 2023, however, the weather - forecast or actual - will no doubt be one of the biggest determinants of ewe turnoff, and therefore mutton throughput, this year.
Looking at the current national mutton price, the start of year spark was the first time the indicator rose above the five-year average since 2022, but it didn’t last for long. Last week’s average price point of 348¢/kg was 25% below the five-year-average for the same week, and 15% below the 10-year average. It is still tracking above the two previous years, however, 20% stronger than at the same time in 2024. Comparison to other indicators can also offer perspective, with the national trade lamb price only 13% stronger year-on-year.
Putting more perspective on pricing is supply, which has hit historical highs. According to National Livestock Reporting Service figures, sheep slaughter averaged about 188,000 head per week last year, with the closest figure to that we have seen this decade being 159,000 head in 2019 - which is why we have used that year as a comparison in our charts. We won’t be heading into the same rebuilding stage of the cycle as we were at the time, but hopefully we are moving into improved rainfall.
We are yet to see the 2024 official slaughter tally come through from the ABS, but it is expected to have reached an 18-year high, with numbers soaring in the final quarter. Now if this is the case, it will well surpass the last forecast for sheep kill from the MLA, and puts a question mark over the forecast 1.3 million head further rise in 2025. As the 2024 total will likely surpass the predicted 2025 slaughter for sheep, slaughter could have already reached as high as it will go.
This is of course where the season will play the biggest role. The last sheep producers intention survey had an even split of 40% wanting to increase their flock in 2025, and 39% wanting to decrease (the remaining staying the same). A good autumn will surely give some support to lamb prices and enable more to be turned off at current in-demand weights, and therefore have a two-fold effect on encouraging increased ewe retention.
On the demand side, global economic slowdown has in some ways been good news for Australian mutton, which sells at a cheaper price-point than our lambs. Strong demand helped offload much of the high volume of mutton produced in 2024 overseas, with a record 255,098 tonnes exported, 22% more than the previous year. China is the biggest mutton market, and while their economy is still being described as “sluggish” it is still growing, and while increases in demand to the extent we have seen in the past may not eventuate, there is still potential for this market to provide an upside. As is there from our third biggest mutton market, the US, as they look to fill a protein gap from a declining beef herd - the wild card here of course being their new president and any trade barriers he rolls out.
The national mutton indicator averaged 230¢/kg in the 2023-24 year, its lowest since 2012-13. ABARES has forecast that to lift to 319¢/kg in 2024-25, an increase of 38%. Currently it is averaging 329¢/kg, and with the price traditionally rising from here through to winter, it’s likely the mutton price will outstrip that prediction.
Jamie-Lee Oldfield is a seasoned agri-media, communications professional and livestock market analyst who lives and works on a family-owned stud and commercial beef and sheep operation in Coolac, NSW.