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Lamb and mutton prices closest on record
19 November 2020
Key points:
- The premium of lamb to mutton is now 17%, well below the five-year average of 32%
- Demand for mutton has supported prices, particularly out of China where ASF persists
- Lamb prices have eased since the start of the year
On Tuesday 17 November, the gap between the National Mutton Indicator and the National Trade Lamb Indicator (NTLI) closed to 17% – the closest the respective indicators have been on record, and well below the five-year average of 32%. Mutton prices have rallied on the back of ongoing demand out of China, where African Swine Fever (ASF) continues to impact pork production. On the contrary, lamb prices have tracked down from the highs reported at the start of the year, with demand for the more expensive product easing off, coinciding with heightened spring supplies.
Mutton prices have remained elevated across much of the year, generally tracking above 550¢ and reaching into record territory in March, when the indicator surpassed 700¢. Last year, the National Mutton Indicator averaged 517¢, while the 2020 year-to-date average sits at 606¢, with a month of reporting still to go.
Despite robust lamb prices for the year so far, the NTLI has eased about 20% from the record highs experienced in March. Spring lamb supply picked up over September while demand has continued to fluctuate in response to offshore markets moving through different stages of their COVID-19 recoveries. Compounding this has been an appreciating Australian dollar, coinciding with financial uncertainty in many end markets.
The spread between the two indicators highlights the strength of the mutton market and easing lamb prices. While both lamb and mutton markets are largely driven by offshore end market demand, mutton has continued to find support as a cheaper animal protein source.
© Meat & Livestock Australia Limited, 2020
