Mr Gidley-Baird said sheep meat prices would remain strong, but wool prices were expected to soften, before strengthening again in late 2020.
“We’ve got the lowest sheep inventory for over 75 years, and the reduced lamb and wool production we are seeing as a result will support prices for 2020,” Mr Gidley-Baird said.
He said reduced slaughter numbers showed producers were holding and rebuilding flocks, now that the season had turned.
The increases in lamb prices experienced earlier in the year, which was 35 per cent higher year-on-year, were not unusual under a supply constraint scenario, but Mr Gidley-Baird expected these prices to soften as the year progressed.
He said with 65 per cent of lamb, and almost all mutton and wool exported, global markets would play heavily on the industry.
“A large bulk of Australia’s product into the Chinese and US markets — 60 to 65 per cent — is eaten out of home, with Australian lamb sold into the US heavily focused on the higher end restaurant market, making it particularly vulnerable to the global economic slowdown.”
He said since late March, lamb prices had softened as demand from consumers decreased.
Lamb and mutton prices have been forecast to come off their highs from earlier in the year, before picking up again through May, June and July.
“Given our supply situation, I don’t expect prices to drop dramatically, unless we were in the very unfortunate situation where multiple processing facilities ended up closing due to reduced margins or a COVID-19 outbreak — reducing processing capacity on market,” Mr Gidley-Baird said.
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