Despite the free-flowing supply in the south Victorian lamb prices found some support, while mutton moved to a new record. WA lamb prices have also rebounded strongly and are now not far off the east coast.
It might be that Victorian lambs are finding support from mutton. The spread between the two prices, usually quite large, has this week come in to 78¢, with mutton at just a 10.5% discount. The mutton discount is about as small as it gets, but last time it was when restocking was in full flight. This time it is more about export demand.
Figure 1 shows Victorian mutton sitting at a new record of 643¢/kg cwt, now well ahead of NSW. It might be that fat sheep are coming out of Victoria, supporting the ¢/kg rate, relative to lighter sheep in NSW.
Lamb supplies appear to be tightening in the west, with trade lamb prices rising to a 3 month high of 709¢/kg cwt. Figure 2 shows that lambs in the west are now coming close to their east coast counterparts, after being at a discount for some time.
Mutton in WA remains at a large discount to the east coast. It seems supply is still outstripping kill space, but as lamb supplies decline we might see some upside in mutton. WA Mutton might not get to east coast levels, but should get stronger