Before Christmas mutton prices took a dramatic downturn. The talk was Chinese demand suddenly evaporating. The New Year has seen mutton return to previous levels, while lamb has also found some strength.
Figure 1 shows the bounce in mutton prices, the National Mutton Indicator closed 2019 at 489¢, and closed yesterday at 561¢/kg cwt. Holding sheep for the extra three or four weeks has definitely been worth it, with $15-20/head added to the price.
Lamb prices have also bounced off 8 month lows hit at the end of December. Figure 2 shows the Eastern States Trade Lamb Indicator (ESTLI) has gained 40¢ to start the year, moving to a nine week high of 738¢/kg cwt.
While lamb prices are still behind some of the forward contracts on offer in the late spring, we can see from figure 1 they are well ahead of this time last year. It took until May in 2019 for the ESTLI to move above 740¢/kg cwt.
In WA lamb and mutton prices have opened lower in saleyards, both well behind the east coast. The WA Trade Lamb Indicator opened at 614¢/kg cwt, while the Mutton Indicator is at just 387¢. If the rain falling in NSW keeps coming WA mutton will have to rise, or sheep will start travelling east in droves.