Anticipated Surge in Lamb Prices Following Robust Start to the 2024 Season in Sheep Saleyards

The pricing landscape for lamb may witness an upward trajectory on supermarket shelves in the wake of a signifcant surge in saleyard sheep prices during the initial fortnight of 2024.

Key developments include:

• Saleyard lamb prices in Victoria have experienced an escalation of up to $50 per animal as the market for 2024 commences.

• Farmers and wholesalers express surprise over the sudden surge, particularly following the low prices observed in the previous year.

• Supermarkets are poised to transfer the escalating costs to consumers.

Justin Cashman, a Western Victorian sheep farmer and proprietor of Midwest Meats in Colac, voiced his astonishment at the abrupt rise in saleyard prices. “Nobody anticipated prices spiking this rapidly, both from a farmer’s perspective and that of a meat wholesaler.

Prices have seen a substantial increase, particularly in the last two weeks.”

Recent observations from saleyards refect this price escalation.

In Ballarat, prices on Tuesday were $30 to $50 higher per lamb on average compared to the fnal sale of 2023. Similar trends were observed in Hamilton and Wagga, with price increments ranging from $30 to $40 and $25 to $40 per lamb on average, respectively. This surge stands in stark contrast to the fall in prices during the spring season, where the market was inundated with farmers offoading stock. Dissatisfaction prevailed among both farmers and consumers for months, as lower prices failed to manifest on supermarket shelves.

In response to the scrutiny, the government has threatened to use “all levers” to ensure supermarkets pass on cost savings. Federal Agriculture Minister Murray Watt expressed concerns over farmers receiving subpar prices and supermarkets imposing substantial mark-ups.

Current supermarket prices for lamb refect stability, with a leg of lamb at $8 per kilo and chops retailing at $12.50. However, these prices are expected to rise as the overall price of sheep climbs. Mr. Cashman highlighted the challenge of sustaining current prices for wholesalers and supermarkets, projecting an inevitable price increase given the recent 30% surge in saleyard prices within the last month.

Market analyst and director Matt Dalgleish expressed optimism for the lamb market in 2024. The approaching Australia Day, combined with successful marketing initiatives by Meat and Livestock Australia (MLA), is expected to stimulate consumer demand, contributing to the positive market outlook. Additionally, a shortage of lamb in the retail market during December and January has fueled the current price spike, indicating strong demand.