Australian sheep and lamb prices in 2017 are each likely to average alongside, or even exceed previous records. As an indication, saleyard trade lambs (18-22kg) averaged a record 557¢/kg cwt in 2016, and for the year-to-date are already at 614¢/kg cwt. However, while tight supply, along with continued strong local and overseas demand and restrained NZ competition, makes for a very positive short-term outlook for sheepmeat producers, a major concern is the sustainability of the current price levels further up the supply chain. In short, producers should be cautiously optimistic about prices beyond 2017, based on continuing demand growth, limited export competition and only an expected modest rebuild of sheep flocks. However, some price falls from recent records can be anticipated eventually, largely determined by the rate at which the flock recovers, and the extent of any permanent reduction in processing capacity.
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