High slaughter numbers are putting the national mutton indicator under pressure as it enters a period of historical seasonal decline.
While the lamb market has been hitting highs not seen before, muttons saleyard prices have been much more subdued, although not insignificant, in their growth.
On the 22 June the mutton saleyard indicator rose above 500¢/kg cwt for the second time on record, the first being in May last year.
While it stayed above the 500¢ mark for 3 weeks, it has since decreased quite markedly on back of increased saleyard throughput of mutton over the last fortnight, up 34% to 101,055 head and an uplift in slaughter.
This increase in supply has reduced pressure on demand and as a result prices have come back 47¢ as of the 30th of July.
The number of sheep slaughtered last week reached 139,000 head, an increase of 43% on the week prior and 39% up on the same week last year and is the single highest weekly kill since 2015.
This increased supply of mutton for slaughter is the culmination of producers taking advantage of the strong prices to offload stock in the face of the continued drought.
While mutton prices had been consistently strengthening since mid-April, the last fortnight has seen a drop of nearly 50¢/kg.
This makes more sense when coupled with the amount of sheep slaughtered during the period of the price decline, 138,865 head were slaughtered last week – the single highest weekly kill since 2015.
This increased supply of mutton for slaughter is the culmination of producers taking advantage of the strong prices to offload burden in the face of the continued drought.
While prices have fallen back below the 500¢/kg mark, it remains quite strong in comparison to historical averages.
The Eastern states mutton saleyard indicator for the 30th of July was 38¢/kg above year ago prices and 85¢/kg above the average price (as at 30th of July) since 2010.
It is also not unusual to see mutton prices ease at this time of year. Since 2010, in the two months following the 1st of July, the saleyard indicator for mutton showed an average decrease of 13%, and a further 14% decrease in the following 2 months to the end of October.
From this perspective it would not be unusual or unexpected to see mutton values come under some pressure in the coming months.