ON FARM NATIONAL MARKET INFORMATION Drought bites further into sheep flock Australia’s sheep flock “The dry conditions have led to sheep fell to 65.8 million head slaughter remaining elevated so far Key points in June, down 6.8% in 2019. However, there has been an year‑on‑year and the easing trend through autumn and a • National sheep flock to fall further largest year‑on‑year decline since slow‑down is expected in the second • Fewer expected lambs to limit 2008, according to MLA’s 2019 half of the year as producers look to winter and spring supply Sheep Industry Projections. maintain their core breeding flocks. • Export demand from China “Overall forecast annual lamb slaughter and the US underpins robust The contraction is being driven by remains unchanged from the January saleyard prices ongoing drought in all key sheep projections, at 21.2 million head, down production regions and heightened 7% on 2018, while annual sheep sheep slaughter, with many “The national saleyard trade lamb slaughter has been revised slightly indicator opened the year at 657c/kg producers now running significantly upwards and is now expected to fall 11% reduced flocks. and has since advanced to 888c/kg, year‑on‑year, to 8.5 million head. 40% above year‑ago levels.” MLA’s Market Intelligence Manager, “Lamb production is expected to be Scott Tolmie, said the combination Scott said the forecast drop in 477,000 tonnes carcase weight (cwt), sheepmeat production in 2019 of generally low lambing rates and down 7% year‑on‑year, and mutton a poor weather outlook for winter is should keep lamb and mutton prices production is now forecast to be 12% historically high throughout the year, expected to disrupt lamb supply in lower than 2018, at 199,000 tonnes cwt.” with an additional upside possible if the coming months. improved seasonal conditions spark Focusing on demand, Scott said “Throughout 2019, rainfall has been the outlook remains positive for restocker activity. insufficient in all key sheep production the industry. “Sheepmeat exports have grown across regions, compounding the effects of most markets during the first four months an extended two‑year period of rainfall “Despite the drought, both lamb and of 2019 with Australian lamb exports deficiencies,” Scott said. mutton prices have reached record to China increasing 22% year‑on‑year, highs in the last 12 months,” Scott said.to 21,000 tonnes shipped weight (swt) “On the whole, NSW remains the worst affected with 99% of the “This has been underpinned by while mutton shipments surged 99%, to state still drought‑declared and strong demand for Australia’s 22,000 tonnes swt,” Scott said. many producers relying solely on sheepmeat exports, which continue “Despite an elevated start to the supplementary feeding programs to push new highs, bolstered by year, exports are forecast to contract to maintain flocks. a declining Australian dollar and throughout the remainder of the year “Elsewhere, very few regions across limited competition. as supply tightens. South Australia, Western Australia “The growth in demand, particularly “Lamb exports are forecast to finish the and Victoria have been immune to from China and the United States, year6% below 2018 levels, at 254,000 the poor conditions. Forming a crucial has translated into strong domestic tonnes swt, and mutton to contract 9%, component of Australian sheepmeat farm‑gate prices, with the national to160,000 tonnes swt.” ■ production, the absence of winter rain mutton indicator breaking through in these states may lead to a disruption 600c/kg cwt in May for the first time mla.com.au/prices-markets/ in spring lamb supply, similar to what and lamb prices quickly closing in on trends-analysis was experienced in 2018. the record highs of August 2018. 21