High lamb prices supported a 1.4 per cent rise in the agricultural price index in January, a NAB report has found, but prices are expected to ease slightly in the coming months.
Lamb prices skyrocketed in the new year, up 17.1 per cent, largely as a result of constrained supply, and NAB agribusiness economist Phin Ziebell said lamb producers should be ‘‘very pleased’’ with the prices.
‘‘We expect stable to moderately higher prices for the rest of this year, continuing the good run since 2013,’’ Mr Ziebell said.
‘‘Export markets for lamb and mutton are reasonably diversified, with the United States, China and the Middle East all taking substantial volumes.
‘‘Combined with our forecast for a lower Australian dollar by the end of 2017, this will support higher prices.’’
Numurkah farmer Peter Mapletoft said regardless of the lamb prices, the industry needed to be sustainable.
‘‘It’s got to be sustainable for everyone,’’ Mr Mapletoft said.
‘‘It’s great to get a good price, but processors, are they able to onsell the meat, not only export but domestically as well?
‘‘I would think that when supply increases the price does come back.
‘‘The suspicion is that (the current price is) on the upper end and we’ve all got to make a buck and hopefully continue to.’’
High lamb prices have been attributed to falling supply, and Mr Mapletoft said it was a result of people leaving the business and going into other forms of farming.
‘‘At one stage I estimated that within a 30-mile (48km) radius of Numurkah, there would have been over 80000 sheep,’’ he said.
‘‘At some stage the prices were very low. They were not high enough (and people left).
‘‘I hope that my lambs will make enough money to cover the cost of what I’ve done, so if it drops too much I’m left holding the baby.’’
Shepparton livestock dealer Graeme Stone said the current prices were certainly above expectations for this time of the year.
‘‘The prices are sitting around the $6.50 to $6.80 per kilo mark. I’d like to see it settle down to $6/kg, that’s my honest opinion,’’ Mr Stone said.
‘‘It’s become about supply and demand. Supply is low and demand is high. It’ll be interesting to see how it goes in the winter.’’