The Eastern States Trade Lamb Indicator is poised to bust through 900 cents a kilogram carcase weight for the first time.
On Monday the ESTLI rose to an all-time high of 896c a kg, a rise of almost 250c or 37pc over a three-month period, Meat & Livestock Australia prices and markets team said.
Whie recent price gains would be described as rapid in anyone's language the MLA team decided to take a closer look at historical data to determine just how extreme current price movements have been.
"On a closer examination we found that despite records tumbling on a regular basis over the last two years, lamb prices have in fact become less volatile than they were earlier in the millennium," the team said.
Price movements, and the rate at which they occur, have huge implications for the whole industry.
"To illustrate this point, a 24kg carcase weight lamb sold during the week ending March 24 would have made $155, while a lamb of the same weight sold last week would have sold for $215 (on average in the eastern states, excluding skin).
"One measure of volatility is the difference between the highest and lowest price level during any one calendar year. Last year was a particularly volatile year, with the ESTLI hitting a low of 571c in April before jumping to 884c by the end of August, representing a rise of 55pc.
"A look back at earlier years, however, demonstrates that this type of intra-year volatility isn't actually unusual. In the 21 calendar years between 1998 and 2018, the average premium of the highest price in the year over the lowest price was 51pc, with 2001 (111pc) the most volatile year and 2010 (21pc) the least.
"In fact, volatility has decreased in the last five years. Between 1998 and 2013, the average calendar year premium of the highest price over the lowest price was 55pc, while this figure fell to 38pc between 2014 and 2018.
"Lower volatility is seen as a positive for most industry stakeholders, as there is more certainty around potential future price levels.
"In the past, when prices have seen rapid appreciation, they have often fallen just as quickly. The fall usually coincides with a recovery in supply levels, such as 2011.
"Based on weekly slaughter data, supply levels are in decline, with no evidence to suggest a recovery is imminent - at least until spring.
"For the week ending June 21, eastern states lamb slaughter totalled 310,000 head, 16pc lower than the same week in 2018.
"So far, in 2019, since hitting a low of 619c in February, the ESTLI has risen 45pc to hit a high of 896c last Monday.
"With prices typically peaking in July, there is no evidence to suggest that prices have peaked just yet," MLA said.
