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Australian lamb producers enjoy high prices

The Australian sheep industry continues to go from strength to strength off the back of increased prices, production and exports, according to Rural Bank’s 2017 Australian Sheep Annual Review.

Strong demand and tight supply in the first half of 2017 has caused the National Trade Lamb Indicator (NTLI) to continue to average higher for the fourth year in a row, averaging 639c/kg cwt for the first half of 2017, 14 per cent higher than the same period in 2016.

National mutton prices are also averaging 38 per cent higher than 2016, as producers held onto their breeding stock and capitalised on strong wool prices.

The new report, launched by specialist insights team Ag Answers, provides producers and industry with a concise analysis on sheep flock, lamb and mutton production, seasonal conditions, prices and demand in Australia and the global market.

Andrew Smith, General Manager Agribusiness for Rural Bank, said the Australian sheep industry is in rude health.

“It’s quite remarkable to have prices and production increasing for so long, showing the consistent, strong growth in demand,” he said.

”Given domestic lamb consumption has remained relatively steady since the mid-1990s, its clear export markets have underpinned the sector’s growth,” Mr Smith said.

“The quantity of lamb exported has increased for six consecutive years and was 62 per cent higher in 2016 than 2010. At the same time, the price paid for Australian lamb has also risen increasing the value of Australian sheep exports.

“Declining production in New Zealand – the largest exporter of lamb to China – has created more opportunities for Australian lamb in the Chinese market, resulting in export volumes increasing 39% compared to 2016. When this is combined with continued growth in Australian lamb’s most valuable export market, the USA, long term demand and prices are set to continue their upward trajectory.”

The only negative to the buoyant conditions is the forecast for a drier and warmer winter and early spring.

The Bureau of Meteorology’s Normalised Difference Vegetation Index (NDVI) showed higher than normal autumn pasture density and greenness for eastern parts of Victoria, New South Wales and Queensland.

However, the bureau is forecasting drier and warmer conditions for much of the parched areas of Western Australia and for south eastern states.

Source: Rural Bank