According to Meat and Livestock Australia (MLA), revised production and slaughter forecasts for 2017 say lamb slaughterings are to be down more than originally expected, falling by 1.5m head on the 2016 record.

Meanwhile, mutton is to fall to the lowest on record at 5.8m, marking a decline of 1.2m head. As supplies tighten after the end of April, farmers are set to receive record prices for their produce.

“The current combination of factors in the market will lead prices to average alongside, or even exceed, the previous records,” Ben Thomas of MLA said, adding that the market was being influenced by extremely strong producer intent to retain ewes for flock rebuilding, the current strength of the wool market and low grain prices.

Lamb production is expected to fall 6% year-on-year in 2017 to 481,600t carcase weight (cwt), before reaching back over the 500,000t mark in 2019.

Risk for farmers when supplies return

“Despite the buoyant market, there is a concern around the sustainability of the current price levels further up the supply chain, with some recent temporary closures of processing facilities,” Thomas said.

There was also warnings that there will be a risk for farmers when supplies do recover: “If processing capacity remains reduced, there is the potential for a greater correction in prices than otherwise would have been the case. However, producers can be cautiously optimistic about prices beyond 2017.”

Imports to be down

The supply shortage is also forecast to affect exports, with a 7% drop expected this year. Lamb shipments are to fall to 225,000t shipped weight (swt), which is lower than originally forecast and exports of mutton exports have also been revised, with 102,000t swt expected to leave Australia this year, down 18% on 2016.

It is expected that the US, China and the Middle East will all remain Australia’s major export markets this year.

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